Hi Bubbleheads, doom ‘n gloomers and market enthusiasts ….
Good Reading: Via Jessica Swesey at Inman News blog gives us a glimpse into the mechanics of the bubble. She cites a paper released last week by Dean Baker of the Center for Economic & Policy Research asks:(PDF document & very easy reading with excellent analysis)
- What about the fundamentals that were at odds with forecasts, particularly those economists from NAR (National Assoc. of Realtors), NAHB (National Association of Home Builders) and the MBA (Mortgage Brokers Assoc.)?
- What role did the media play?
- Why was it so difficult for many to see that housing prices were spiraling to absurd heights?
“In many cases, the experts worked for organizations that had a direct material interest in sustaining the bubbles. Voices of caution were rarely presented. When it came to some of the most fundamental financial decisions that families face, investing retirement funds and buying a home, the media were badly misinforming the public.”
– Center for Economic & Policy Research, August 2007.
In other news: I’ll be visiting Massachusetts late this week and into next week and will compare and contrast market conditions in New England vs. Washington State. I expect it to be interesting and I’m crossing my fingers I can talk with the CEO of one of the largest investment management companies in New England to discuss the recent liquidity crisis. Wish me luck because it is intimidating talking to someone who manages literally billions.
Your real estate market enthusiast,
“S-Crow” (Tim Kane)
Legacy Escrow Service, Inc.