Has This Market Hit Bottom?
May 12, 2008
If you’re like me, you’re getting a little frustrated with the media’s reporting on the current housing market. It’s a mess, a crisis, a disaster- I’ve heard it all. I understand that sensationalism sells, but the real problem is that the information reporters rely upon to make these dire assumptions is often inaccurate.
The good news is that some reporters are finally figuring it out! On May 1, MarketWatch carried a story written by Chris Pummer, a respected financial reporter, who contributes to many mainstream newspapers. In his report, “Home Price Data has its Flaws,” he noted that the much relied upon S&P Case-Shiller Home Price Index might be giving “imprecise readings of price changes at all levels.”
Pummer also noted that most surveys don’t agree and that many are flawed by their assumptions, and are using negative hyperbole when describing our current market. It has also been reported that S&P had admitted that their report may “paint an incomplete picture.” Really, you think so?
On May 6 The Wall Street Journal printed a guest editorial by hedge fund manager Cyril Moulle-Berteaux entitled, “The Housing Crisis is Over.” His premise was that April 2008 could very well mark the bottom of this market, but he emphasized that a bottom doesn’t mean that we’ll instantly return to 2005, but that “the trend is no longer getting worse.”
Moulle-Bertreaux bases his conclusion on the affordability of housing today, the price versus household income. He also says the so called “experts” who say the market has another 30% to drop are making a “simplistic analysis that is appealing on the surface, but is flawed for a variety of reasons.”
I have always said that the housing market is like the stock market, no one can predict an exact high or low. At the same time, I am encouraged today by reports from our Affiliates around the country that lead me to believe we are near a bottom. It could take until the end of the year to know for sure if things are turning around, but in the meantime, we could certainly use more accurate and sensible reporting on the situation.
But tell me what you think? Have we hit bottom? What’s it like in your market? Post a message to my blog and let everyone know how things look from your view point.
Also, I would encourage you to read the two articles that are linked above and pass the word – the sky is NOT falling down and there’s never been a better time to buy a house. Dave
Copyright © 2008 RE/MAX International Inc. 5/12/08
