Are real estate ads the Seattle Times main source of income?

george

The local real estate industry must be impressed with the Seattle Times today. They explain their motivation to write the story that says Seattle is bubble free:

"Rhodes said the idea for today's story was "based on the concern people have that the housing market is cooling, and the 'bubble' bursting. National stories are saying this. But all real estate is local, so it made sense to explain to readers what's happening here. And economists say Seattle doesn't have a 'bubble.'"

All economists say Seattle doesn't have a bubble? Really? No debate at all? What's the source for this amazing assertion. Or should I say false assertion.

No matter. Perhaps real estate advertising in the paper will double out of gratitude.

If you read the article, Rhodes quotes mostly cheerleaders from the real estate industry like Lawrence Yun of the NAR, without any mention of his extreme bullish views.

Here's what Yun said this month about the national housing, after it dropped three quarters in a row:

"Essentially, we see that the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction," he said in a statement.

Do "all economists" say that too? Heh.

Somehow though Elizabeth Rhodes did manage to let this one slip through from a Fannie Mae economist:

"If you look at a graph of Seattle's home-price appreciation, it's less a straight line and more jagged ups and downs than most cities," Berson said, adding, "the good times are better, and the bad times are worse."

Now that would have made a good ending.

Lionel

I'm just relieved that we're in a broad cyclical trough.

george

Lionel wrote:

I'm just relieved that we're in a broad cyclical trough.

To all of the various problems affecting U.S. housing, we can now add a case of schizophrenia.

The most widely watched housing authorities -- the National Association of Homebuilders and the National Association of Realtors-- appear to be gazing into completely different crystal balls. On Tuesday, the folks in the Realtors' group, adorned in their most stylish rose-colored glasses, released a report stating that "the data shows a broad stabilization." As senior economist Lawrence Yun explained further, "... we see that the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction, with a modest gain from the fourth quarter." Uh-huh.

But on the very same day, the builders' organization across town noted that "homebuilder confidence sank to a 15-year low in May as lenders made it more difficult for borrowers to qualify for mortgages and order cancellations mounted." As a result, its Housing Market index descended to a reading of 30, versus 33 in April. As the group said in releasing May's results, "Readings below 50 mean more builders view market conditions as poor rather than favorable."

http://www.msnbc.msn.com/id/18702503/

mike2

Anyone know how the effect of out of state investors and lending statndards set by national and international banks affect the assertion that "all real estate is local"?

One could argue that there isn't a good measure of out of state investment dollars flowing in, but there's absolutely no evidence that the lending standards are any different here than in other major cities.

Given that the majority of the price and volume changes in the local RE market coincided with changes in lending standards, it seem highly unlikely that the local conditions are in any way isolated from the national trends.