The NAR is really looking like Fox News these days. They need a catchy brainwash slogan too - "Fair, Balanced and Unafraid" is so classic, and taken. Perhaps "Desperate, Laughable and Anyone Hiring?". From Piggington:
This week's Voice of San Diego article concerns wildly incorrect data in the NAR's so-called Anti-Bubble Report for San Diego (which you can read here).
Buried in the middle of the report is this gem:
...only 3 percent of the  loans have loan-to-value ratios above 90 percent, so the foreclosure risk is rather minimal. (That is, prices would have to decline by more than 10 percent to have a measurable impact on foreclosure rates.)
At first glance, this statement appears to maintain that only 3% of 2004 San Diego homebuyers made down payments of less than 10%. Regular readers of this site know that this is categorically untrue. The correct number (per DataQuick) is that 38% of 2004 homebuyers made down payments of 10% or less. A full 27% of buyers made no down payment at all!
The other way to read this sentence is that only 3% of individual loans had LTVs over 90%. But this is irrelevant—a buyer with an 80% first mortgage and a 20% second mortgage has no loans with higher than 80% LTV... but the buyer is in the hole for 100% of the property value. The latter is, of course, the meaningful statistic when it comes to predicting foreclosures. But NAR goes on to cite this data as evidence that foreclosure risk is minimal unless home prices decline by more than 10%.
March 19, 2006
Posted by blogger at 3/19/2006