Fact or Fiction: The US Housing Market is "gently correcting". In fact, "now is a great time to buy!".
...and here's some carefully staged, professionally smoothed, and attractively presented data from the NAR et. al. to prove it...
But wait a minute, someone has actually taken the time to go get the same source data sets and draw the same graphs. But they've come to a very different conclusion...
Source: John Burns Real Estate Consulting
John Burns Real Estate Consulting has performed some primary source research which pretty clearly reveals that the real-estate cheerleaders have been doing a bit more than simply cheering. They've been "spinning" the data. In fact, spinning it right out of realm of reality.
Based on actual home closing data from 181 markets around the US, they discovered that there is an enormous discrepancy between data being reported by the real-estate industry and reality.
The preponderance of evidence shows that the housing market in vibrant areas where home building is prevalent has corrected much more than some people believe it has. [Emphasis added]
This is huge. Enormous. I can't overemphasize how big of a deal this is. There are a few reasons why:
- As pointed out in the commentary on the research, if this is true then Federal policy makers are basing their policy on faulty assumptions.
- If this is true then it explains the suspicious "surge in activity" many of us have witnessed in the more exclusive, prime, bubbly markets. Seems like there's lots of people buying suddenly, but many homes are going before ever hitting MLS and no one's quite sure what the closing prices are yet (the data won't become available for some months yet).
- It could be that the market has already corrected significantly, and some people are missing the chance to buy at a deep discount.
- Regardless, we can no longer trust our press -- not even our businesses and financial media -- to exercise a single moniker of journalistic integrity. They are nothing more than a 24-hour infomercial mouthpiece for any industry willing to put out advertising dollars.
I've had a strong suspicion from my own anecdotal observation that house prices have been coming down significantly for a few months now. Where I live, in Marin County, CA (just north of San Francisco; a very expensive real estate market), the reaction has been more "pocket listings" and other atypical types of real estate sales. Lots of homes seem to be turning while others, often seemingly better priced and nicer, languish on the market for many months. Something is certainly amiss in Marin. More importantly, I've been hearing isolated (yet unsubstantiated) accounts of low ball offers being accepted.
One of the unique economic aspects of residential real estate is that fact that the markets are driven so heavily by information asymmetry. It seems that this monopoly-on-information is maybe even more widespread, more intentional, and probably more damaging to everyday home buyers than I had thought.