Wednesday, July 23, 2008 at 11:45AM
More Spin From CB
FROM COLDWELL BANKER
After the gloom in the media and on Wall Street about housing values, someone forgot to check the stats!
Recently there have been a lot of stories about isolated areas that have seen 20% reductions in home values. Most agree that these areas saw the highest run-ups over the last few years. What seems to be working is the fact that housing affordability is now driving a reversal. Again, not everywhere, but the stats need to be appreciated. Interest rates are still very attractive and stable these days. In fact, the Mortgage Bankers Association reported increased mortgage applications and listed stable rates as an indicator.
The National Association of Realtors has now reported four straight months of rising housing prices, but it seems no one is listening. According to NAR statistics, the median home price has fallen from a high of $230,200 in July 2006 to a low in February 2008 at $195,600, a drop of 15%. Since February, however, it has risen steadily every month. By May the index (which will be revised on July 24) had risen to $208,600, up $13,000 and a full 6.6%. Another indicator, the mean home price (otherwise known as the average home price), has also shown strength and has risen from a low of $242,000 also in February of this year to $253,100, a rise of $11,100 or 4.5%. It has also risen every month since February of this year.
'I just don't know where Wall Street's brains are today,' said David Michonski, CEO of Coldwell Banker Hunt Kennedy in New York City. 'Everyone on the Street is wringing their hands over housing when in fact the average American has been out this spring buying homes and pushing the median price higher. This has got to go down as one of Wall Street and Main Street's biggest disconnects in history.Rising prices on expanding volume should not a crisis make on Wall Street,' says Michonski.
So why the crisis?
They say that there are bulls and bears on Wall Street but there are also pigs. Pigs try not just to profit from a crisis but create one to profit from. Today there are just so many people who have positioned themselves to profit from a crisis that they refuse to admit the reality of what is happening on Main Street. It might hurt their positions.
Is this the bottom?
No one can know for sure, but the hard data is clear. The median price has risen four straight months. The average American is out there taking advantage of bargains in their local real estate market. They are not listening to Wall Street but following their own belief that the best time to buy is when no one else is, and they are out there buying. If this keeps up, February may prove to have been the low in prices.
It is possible that it will not be Hank Paulson or Ben Bernanke who will pull this country out of a housing recession, but the good common sense of the average American whose affordability to buy a home is at a five year high and is acting on it.
Jim the Realtor
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Typical for CB. The more they can hype up false ethereal views of "everything is peachy" the more the corporate clowns can put in their pockets from pillaging their foolish agents.
Coldwell Banker is pathetic.
Paulson and Bernanke are just taking taxes collected from the middle class and giving it to Wall Street/The Banks. It's called socialism when things like this happen in other countries. Welcome to the new world order.
"The average American is out there taking advantage of bargains in their local real estate market . . . following their own belief that the best time to buy is when no one else is, and they are out there buying."
So are they saying an average American does what no one else is doing? I guess I'm confused on the definition of an "average" American. They clearly don't even know what they're saying. I don't think they even know what they're TRYING to say.
I expect spin, but from a CEO? A CEO! It's not a good sign for any company when intelligent consumers can easily and immediately identify the CEO as a total fraud. I really can't even comment on his remarks because I don't know where to begin.
I believe it was the same CEO that a couple months ago said that people on the fence should base their decision to buy on statistics published by the NAR and like groups...This guy is such a loser. I wonder how many investment properties he stands to lose.
It's a good thing Coldwell Banker doesn't make any money selling Real Estate or else their motives would be suspect.
Here we go again. Back when subprimes were starting to default at the peak of the bubble, almost everyone ignored the giant elephant in the room. With Alt-As increasingly defaulting, too many are trying to ignore the second elephant in the room.
Fine, but I'm waiting a month or two and then shorting their stocks again.
February is the second-lowest month for housing activity, so an increase from Feb to June is nothing special or interesting. The NAR's own figures show that, year on year (to account for the seasonality) May prices are down 6.3% over the U.S. as a whole and 16.0% in the West.
This makes me think of politicians who claim they are doing something for the deficit when all they have done is reduce the rate of increase. Big whoop.
Lol, Rob Dawg. You certainly have a way with sarcasm.
Last I checked, it was "the good common sense of the average American" that helped cause this whole mess. When people who are ignorant about markets start speculating in force it usually ends in disaster.
San Diego: a foreclosure sanctuary?
Remember he's up for re-election this fall....
JtR- Is CB expanding in North County? Recently they've merged/acquired two decent sized co's in Chula Vista/South Bay. One independant- Royal Realty and more recently Realty Executives Premiere (3-4 offices) re-branded to Coldwell Banker- Premier.
They call me twice a week, but I'm standing firm on my offer.
CEO at $20 million per year for life, or forget it.
They have a decent sales force, but their upper management is killing them. Rick Hoffman, the local VP, can't stop from blabbing in the U-T about once a month about what a great investment his first house was that he bought in the 1970s, so you should buy a house today. huh?
Give people the truth - we want the truth! Help them, not spin them!
P.S. I'm working on bubbleinfo T-shirts, give me two more weeks.
Would you expect a bunch of clowns to say anything different? C'mon this isn't news JtR. You've certainly got better things to do.
You're right - I'll get back to the T-shirts!
The minute one of the clowns uses somebody besides the NAR for statistics, then it might be worth a look. The minute I see N.A.R., I start chuckling.
following their own belief that the best time to buy is when no one else is, and they are out there buying.
Anecdotally, every time somebody has gotten wind in the last year that I've been thinking about buying a house, they all say "now is a great time to buy" or "buy now before it shoots up again"
The real reason very few are actually out buying is because there are no more funny money loans with stated income, 0% down and teaser rates.
Jim,
Will the t-shirts have your face on them? If so, I think I'll be spending more time over at OC Renter's blog :)
Wow! At first I thought this was Jim-Speak and I was flabbergasted then I realized I was in a War of the World scenario! I was ready to panic until I realized this was quoted from CB and not Jim. Whoa - my heart is still beating too fast ...
Jim noted: P.S. I'm working on bubbleinfo T-shirts, give me two more weeks.
Please put a link in a corner of the web site. I won't be able to buy then, but I'd love one!
Got Popcorn?
Neil
this bail out makes me so sad. all of this corruption and greed, traped so many of us into difficult situations, buying into the mania, and getting trapped in the down-turn, or becoming renters. Now to top it all off "we the People" are now forced to bail out the greedy who made our life so difficult these last 6-8 years. Now the US treasury steps in to prop up the housing market. No matter what it seems like we are ending up on the short end of the stick. All I can say is that this is a very sad situation.
Speaking of psycho-babble, from the guy who predicted that March would be the bottom:
Cramer says: “We saw quarters from Wells Fargo, fromUS BANCORP, We saw a quarter from JPMorgan, We saw a quarter from Bank of America. And those guys had already put charges in that made it so that when housing does bottom, they will be overreserved. That’s the ticket. That’s what Wachovia did. They anticipated a housing bottom and they’re going to be right.” The Federal Housing Authority will put $300 billion to work to help homeowners with exotic loans and that will put a bottom in housing. “I was the first guy that said torch your house for the insurance money. I am now telling you that between now and the next six months you have to buy a house.”
No. The low in prices will be right around when you tell your family that you bought a house and they all say, "You did WHAT??!!??"
--Shannon
"Is this the bottom?
No one can know for sure"...
Crap. Pure crap!
I know.
Doesn't everyone know?
All real estate is local.
And let's face it, if you're making $50-$60K, buying a $208K home isn't an issue. For many markets, I suspect they are at or below rental parity.
For the bubble poster childs in CA and FL, forget it.
"Isolated" markets with 20% drops. These "Isolated" markets include: California, Nevada, Arizona, Florida, Massachusetts, and Northern Va. These "Isolated" markets are only 40% of the US populations so clearly everyone is overreacting. It can also be argues that NYC and suburbs are also suffering which means in just those "isolated" markets 50% of the US population has seen steep declines.
The NAR and deadbeat companies like Coldwell Banker have about as much credibility as the Easter Bunny.