Way back in the dark ages, when I was in graduate school getting a master’s in communication, the subject of opinion research so interested me that I developed and conducted a survey for my master’s project.
The result of that intense effort has been my enduring interest and unmitigated skepticism about polls and other studies that are disseminated by the news media.
Although the news media have grown more sophisticated, especially about political polls, I find myself to be continually astonished by how much evidently shoddy research finds validation on the Internet, in newspapers and magazines, and on radio and television.
Regular readers no doubt recall my recurring rants about research on the nation’s housing market, none of which is entirely — or, for that matter — even mostly accurate. Case-Shiller is my favorite target, a great example being in Sunday’s New York Times, when Shiller cited his research based on 407 and 296 respondents in different years as if they represented a national sample of home buyers. Impossible!
For that matter, how could 407 and 296 responses each reflect national sentiment? If 296 is sufficient, why poll 407? Conversely– you get the idea.
If only Shiller were alone. But none of the others — not Trulia, not Zillow, not RealtyTrac, not CoreLogic, not Radar logic, not the federal government, not one — reveals the true story.
Findings may be out of date, Continue reading
The latest statistics indicate growing signs of a housing recovery, but mark any recovery as tentative.
Increasing strength could be undercut in a number of ways. Among the uncertainties are unemployment, mortgage rates, the condition of both the U.S. and global economies, and consumer confidence. Also to be considered is the so-called “shadow inventory.”
Still, new information suggests that perhaps we are not only seeing the proverbial light at the end of the tunnel, but possibly our journey through the tunnel has ended.
The news in the last day or two is, of course, conflicting. There is evidence that the supply of housing has dropped dramatically (in the chart above); builder confidence is inching up; home construction of new homes jumped in January; the Conference Board said today that its index of leading indicators ticked up by 0.3 percent; today’s inflation measure shows an unexpected rise; it could take up to 33 more months to dispose of the supply of homes facing foreclosures; and some economists foresee another dip in the housing market.
Do you want the good news or the bad news first?
The good news is that reduced confidence leads to reduced inventory, and Lord Keynes was right about the correlation between supply and demand.
Additional good news comes from HUD, which documents promising increases in housing starts and permit issuance.
The bad news is that decreased building means fewer jobs and a sluggish economic recovery. Continue reading
Builder confidence in the market for newly built, single-family homes rose one point in August to its highest level in more than a year, according to the latest reading of the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). But they’re a long way from ebullient.
Other signs that a housing recovery may already be under way also have emerged recently. Continue reading
Production and permitting of new single-family homes continued on an upward trajectory in July, according to newly reported numbers from the U.S. Commerce Department today.
But substantial declines on the multifamily side dragged down the overall numbers, with combined single- and multifamily starts down 1 percent and permits off by 1.8 percent. Continue reading
According to the National Association of Home Builders (NAHB), it’s not the economy, stupid. It’s not those avaricious lenders of sub-prime loans to unqualified buyers. It’s not exotic hedge funds. Nor is it government regulators.
No, it’s. . . appraisers!
Get this from an NAHB press release this week (and just wait until you read the last paragraph of the release, in boldface way below):
“Using foreclosed and distressed sales as comparables with appraisals on single-family homes without adequately reflecting the differences in the condition of the respective properties is needlessly driving down home values.”
That’s the lead paragraph. The release then quotes its chairman of the board, whose photo is below. Says Joe Robson, a home builder from Tulsa, Okla.:
“Any home buyer can recognize the difference between a well-kept home and a distressed property that is damaged or not properly maintained. So it only makes sense that an appraiser should be required to consider the overall condition of a property and the specific factors related to a foreclosure or distressed property sale when selecting and adjusting the value of comparables.”
If you are buying or selling real estate, this is an issue that you’ll discover runs close to home. One reason Continue reading