Who can you believe?
Good Morning,
Back East, the Wall Street Journal's bullish group of more than 50 economists were leaning 2-to-1 that the worst of the housing bust is already over with only mild price declines to come. "We're nearing the end of the slowdown for most markets," said Ethan S. Harris at Lehman Brothers, reporting to the Wall Street Journal.
Out West, on the same Monday, Nov. 20, more bearish forecasters said the worst is yet to come with some areas still due for 5 to 15 percent price declines. "These housing cycles have typically lasted about three years, four years. They don't get over in six months. So all the rhetoric you see from people in Washington saying it's over, it's just not right," said Ken Rosen, at the Fisher Center for Real Estate and Urban Economics at the University of California-Berkeley.
It could be confusing times for housing consumers trying to sort out what's really happening in their local housing market when forecasts published by the media are flying with so much turbulence. But housing consumers are more down to earth than the real estate industry often gives them credit.
Rather than being swayed away from the housing market by gloomy housing news reports, as recent real estate industry complaints have charged, consumers pay more attention to their own, individual housing needs, goals and market conditions, then what's published in the media.
When consumers think about buying or selling a home, what's in the media is one of the last things on their mind, according to a recent survey by the National Association of Home Builders (NAHB). The vast majority, 80 percent of survey respondents, put housing prices, the cost of housing, at the top of the list.
That was followed by:
· The prospect of selling their current home at a fair price, 70 percent.
· The potential for a home to increase in value, 71 percent.
· Mortgage interest rates, 69 percent.
· Personal life changes, such as a new job or a family addition, 60 percent.
· News stories on real estate market conditions, 28 percent.
Among eight items, news reports was at the bottom of the list.
Also, 48 percent of consumers surveyed said the media had no influence whatsoever on their buying decision; 19 percent of consumers said the influence of the news media played an important role in buying decisions; 23 percent said it had some importance and 7 percent said it played a minor role.
The survey found 61 percent said the media is only "sometimes trustworthy" as a source of information on the housing market, while only 5 percent said that it is "always trustworthy," 20 percent said it is "seldom trustworthy" and 8 percent said the media is "never trustworthy." What we do know for sure is that 8 out of 10 people buy homes for lifestyle reasons not economic ones. Day trading for quick profits should be confined to the stock market and not the housing market regardless of the news.
Back East, the Wall Street Journal's bullish group of more than 50 economists were leaning 2-to-1 that the worst of the housing bust is already over with only mild price declines to come. "We're nearing the end of the slowdown for most markets," said Ethan S. Harris at Lehman Brothers, reporting to the Wall Street Journal.
Out West, on the same Monday, Nov. 20, more bearish forecasters said the worst is yet to come with some areas still due for 5 to 15 percent price declines. "These housing cycles have typically lasted about three years, four years. They don't get over in six months. So all the rhetoric you see from people in Washington saying it's over, it's just not right," said Ken Rosen, at the Fisher Center for Real Estate and Urban Economics at the University of California-Berkeley.
It could be confusing times for housing consumers trying to sort out what's really happening in their local housing market when forecasts published by the media are flying with so much turbulence. But housing consumers are more down to earth than the real estate industry often gives them credit.
Rather than being swayed away from the housing market by gloomy housing news reports, as recent real estate industry complaints have charged, consumers pay more attention to their own, individual housing needs, goals and market conditions, then what's published in the media.
When consumers think about buying or selling a home, what's in the media is one of the last things on their mind, according to a recent survey by the National Association of Home Builders (NAHB). The vast majority, 80 percent of survey respondents, put housing prices, the cost of housing, at the top of the list.
That was followed by:
· The prospect of selling their current home at a fair price, 70 percent.
· The potential for a home to increase in value, 71 percent.
· Mortgage interest rates, 69 percent.
· Personal life changes, such as a new job or a family addition, 60 percent.
· News stories on real estate market conditions, 28 percent.
Among eight items, news reports was at the bottom of the list.
Also, 48 percent of consumers surveyed said the media had no influence whatsoever on their buying decision; 19 percent of consumers said the influence of the news media played an important role in buying decisions; 23 percent said it had some importance and 7 percent said it played a minor role.
The survey found 61 percent said the media is only "sometimes trustworthy" as a source of information on the housing market, while only 5 percent said that it is "always trustworthy," 20 percent said it is "seldom trustworthy" and 8 percent said the media is "never trustworthy." What we do know for sure is that 8 out of 10 people buy homes for lifestyle reasons not economic ones. Day trading for quick profits should be confined to the stock market and not the housing market regardless of the news.
posted by Ken Calhoon at 7:34 AM
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