I find it mildly amusing when Main Stream Media (MSM) suggests that bloggers, and industry professionals who rely upon the Internet to disseminate their professional opinions/research, should not be considered a trusted resource as a whole.
A case in point why MSM’s argument is rubbish: this scathing article by HousingStory.net about the collapse in real estate sales went largely unnoticed by “trusted” financial media outlets.
According to the article, not only did MSM miss the “A Record Fall to a Record Low” argument, but it also avoids the standard, preconceived opinion analysis (likely influenced by confirmation bias) so commonplace in MSM, and presents a data driven, numbers based analysis.
Pending-home sales now stand below the worst numbers we have seen since the housing crash started in 2006. The rubber bands and duct tape are breaking apart. Presume the fix of a fall is in.
The smart investor is going to look at these charts on pending-home sales and have a real advantage over the common media consumer. The pending-sales figures are a dramatic concurrence — a record fall and a record low.
So I will give you my opinion: All hell has broken loose all over again in real estate. Don’t buy a home. Sell one.
The data driven commentary and conclusions from Mr. White are among the most bearish, and probably the most realistic (versus the positive spin propaganda from the National Association of Realtors), that I’ve seen when it comes to the U.S. real estate market after the government’s tax credits expired. Big shocker — cortisone shots (e.g. tax incentives) only delay future pain, not cure the injury.
Of course, there could be pockets of strength around the country that could shrug off a double dip in real estate prices or areas that have the good fortune of avoiding calamitous events (e.g. sunbathers in gas masks) increasing the likelihood of distressed sales.
But, by in large, the severity of the real estate bubble was fairly wide spread and based upon the data, it would appear the fish (home buyers and real estate investors) aren’t taking the bait (historic lows in 30 year mortgage rates).
Which would suggest that real estate devaluation is likely to continue and there is little reason to catch a falling knife. Unless, of course, you are more attracted to cheap leveraged capital and are willing to gamble that your real estate investment will not decline in value post transaction.