Thursday, February 7, 2008

Spring time

With all the Super Tuesday, Super Sunday and probably a Super Thursday I missed somewhere, I've not paid much attention to the housing crash. Thankfully a couple of headlines this morning brought me back up to speed.

DR Horton posted yet another huge loss. And the December pending home sales number was the second worst ever. Ho hum.

I didn't bother reading the whole thing, but here is what most likely was said:

- NAR (National Association of (Lying) Realtors is predicting this is the bottom and now is a great time to buy

- Real Estate experts agree with the NAR and also say now is a great time to buy

- The MSM forgets that the NAR and the so-called experts were saying now is a great time to buy 18 months ago as well
Now that Super Duper Tuesday Sunday is over, the delusion starts again for those desperate to sell. They pulled the listings in December since nobody buys during the holidays. And in January it's too cold (even in Phoenix amazingly enough) for people to buy or so the conventional wisdom tells us.

Now spring is just around the corner in many parts of the country. And the delusional real estate agents and their clients will start having visions of blooming flowers and selling homes. Hope springs eternal for these people. What they forget is that the fundamentals haven't changed. Prices are still way too high. The day of the fog test to get a mortgage are long gone. Strawberry pickers who bought $720K homes in 2005 can't even buy a $72K home today.

This will not deter the so-called experts from telling us that there will be a turn around. And the MSM will scream with headlines like 'HOME SALES SOAR IN MARCH'. That is March will be better than Feb as it is every year. But the MSM will conveniently ignore that March 2008 will be much much worse than March 2007 which was itself much much worse than 2006. And the same with April and May and June. The same game they play every month confusing MOM with YOY data.

And of course on the campaign trail John Rodham McClintobama will tell us how he/she will save the housing market (while at the same time complaining about the lack of affordable housing). And amazingly enough people will believe that a mere mortal like John Rodham McClintobama can single handedly stop the forces of supply and demand. Then again they also believe that "FREE" health care is free, so what can you do.

Ahhh yes...spring time is upon us.


Anonymous said...

If a nuclear bomb exploded in Times Square, the NAR could spin it into a Chinese firecracker attack.

We have quite a few housing cheerleaders here in AZ. And in my city of Scottsdale, people who stupidly bought at the peak are upside down in a hilariously overpriced converted apartment or shitbox ranch house. I was a manager in the banking industry up until recently and have endless stories of how greed and stupidity collided during the peak. And, yes, the home equity loan was used and abused like you would not believe.

The most annoying part? Everyone thinks they know everything about housing in Scottsdale (and Phoenix). They know the comps, what "the house down the street that is not as nice as mine" sold for. It is almost comical at some times to listen to people caught up in the bubble rationalizing the errors of their ways.

I watch a lot of the realty sites out here and it is such a stupid time to buy that I can't imagine why anyone would right now. I see condos that were sold in the 320k range now going for 200k. Houses in the most desirable areas have dropped by 200-300k. I think we have about 3-5 years to go before prices are realistic again.

Ed said...

"The most annoying part? Everyone thinks they know everything about housing in Scottsdale (and Phoenix). They know the comps, what "the house down the street that is not as nice as mine" sold for."

Oh man that is so true and believe me not a Phoenix phenomenon. People view their homes like their kids. Their kid is always above average in smarts. Just like their home is always above average and always the best on the street.

And of course THEIR state, county, city, neighborhood, subdivision, street is different and immune to what's happening everywhere else.

christine said...

John Rodham McClintobama

haha, that's funny!