August 28, 2006

PBS Video on the collapsed housing market, with NAR hack Lawrence Yun, who must have missed the NAR Bubble Has Popped presentation

Is the bubble all over the mainstream media back in the US? It sure feels that way sitting a few thousand miles away here...

One thing driving me batty right now though is the media reporting that prices went up 1%. No, actually, they're crashing - the use of incentives is distorting this number to the point that it's completely unreliable. In addition, they're reporting it versus a year ago. Why is that relevant?

The real comparison for any market is price versus the peak. Here's a good site to look market by market with charts and graphs for certain timeframes. The true comparison should be "Home price dropped X% since they peaked in Y month." But even that like I said is bogus because of the incentives/cash back manipulation going on.

Here's the video, pretty interesting, but the NAR hack is a joke, given what we saw from them on their internal presentation. He's here saying that there are "many people on the sidelines" that'll make everything OK dokey, soft landing, robust job creation, "we are returning to more normal housing activity", "healthy cleansing", blah blah blah. Why does the MSM let these discredited hacks on?

I do laugh a bit because you know every person reporting on this story owns a home themselves and while someone is blabbing away, they're doing the math in their head how screwed they are, and man, think how different this piece would have been if HP or Robert Shiller or Chris Thornberg were the studio analyst versus the NAR hack..


Anonymous said...

Because these NAR Hacks have been paying %50 of all media advertising budgets across are types of media for the last 5 years!

If you'd like to short real estate and insider tip is to short advertising companies that specialize in Real Estate & Mortgage ads, they will go under.

Google is the best Real Estate bubble short as abou %40 of thier ad revenues are from small to large real estate and mortgage brokers looking for leads.

keith said...

hmmm.. interesting thought on google and ad industry. Can you prove the google number?

Newspapers are also going to get killed - think how many ads are real estate - it's gotta be a crazy percent, especially in Arizona and Vegas etc. Entire supplments, and all the good space in section A

pmd said...

I downloaded and read the NAR PowerPoint presentation. Like many others, I couldn't believe what I was seeing (and I consider myself cynical).

However, there seems to be a increasing sprinkling of positive anti-bubbleness in the MSM. I've heard others like Mr. Yun in the papers and radio.

My guess is that the NAR is trying to motivate its ranks to pressure sellers to lower prices and move some inventory (after all, 5-to-6% of 2002 prices is still pretty damn good). On the public front, the NAR and REIC in general want to convince the sidelined buyers that the knife is not falling, but rather is suspended in midair.

keith said...

the NAR needs to come out one way or the other - this knife hanging in the air is what has frozen the market - nobody wants to move

I think it's brilliant if they come out with "it's crashing - sellers need to be realistic and buyers have the chance of a lifetime!" message. that'll get some transactions flowing (and their membership can eat again)

veritas_faust said...

Shiller was on NPR a few days ago, but he was surprisingly mild in his position.

He discussed "Irrational Exuberance" and made his tradtional points but wasn't as sharply critical of the RIC.

Fact is time has validated our position and proved that we indeed were not chicken littles.

veritas_faust said...
This comment has been removed by a blog administrator.
Anonymous said...

On a related topic. US cars, say GM/Ford/Chrysler are discounted at an extreme rate. Eg. a JEEP Grand Cherokee is base 28-29k, yet you can pick up a new one (2007 model) for 18-19k due to dealer incetives. The discounts are so large that the MSRP is a meaningless number. (MSRP numbers are likely used for creative financing of fools with low/no down payment and poor math skills)

Is this what we will see in new housing moving forward. I.e. MSRP to keep the "price" artificially high (and keep those who bought in '05 happy), but discounts extremely deep to be able to move inventory.


RipeDurian said...

Lawrence Yun calls for the housing slowdown to end in time for 2007 spring selling season.

*slaps Lawrence Yun across the face turning that dumbass smile upside down*

Anonymous said...

I am picking up some great tips here-will short google and others asap.Probably puts.I expect as the desperation increases that google will rise for a short period,then the builders will cut there losses,cut ad spending,then run.Thanks for the tips will be going long Gold Silver,will buy puts on builders,and the DOW for sure,keep 40% cash (Japanese yen,Swiss Frank)60%hard assets.

Anonymous said...

I don't trust this poster above me, I think he is the person who posted the first post about shorting Google. Something smells here. Someone should research the first posters claim about 40% of google revenues coming from real estate ads. I think this person just wants us to jump in and short Google, beware.

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