News lags reality

Some erroneously blame the media for slower sales. In fact, the media has been lagging the reality of the housing market. For a long time they've parroted the NAR's insistance of a rebound in the spring or the "soft landing" propoganda.

But now... they're losing subscribers. Who's going to buy something that is only an obious mouthpiece for their advertisers?

So the daily breeze has an artilce on soft housing markets:
http://www.dailybreeze.com/business/articles/4705351.html

The feeble U.S. housing market showed more frailty when third-quarter home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed on Monday.

The real estate market's persistent weakness during the past year has reined in expectations for economic growth but hasn't been severe enough to offset a rising stock market, lower gas prices and improved consumer expectations.

They also have in the from of the business section an artile tiled "What they'll do to close on a home." Gee... now why can't I find that on the web site? Its talking about how buyers don't want to buy in a "buyers market." Also how selling $1 million dollar homes is getting tougher. Ok, they don't say it... but its pretty obvious the author did want to say it but the editor cut that out of the story.

USA today had bearish home articles too.

Money magazine also had recomendations on downsizing real estate investments. It even went into how it could be wise to downsize the house to reduce exposure. Good advice. Nov 27th edition (IIRC). Sorry no link, I was browsing post turkey day through someone else's copy.

And yet they wonder why buyers aren't buying?

Simple, a $1.0M home takes about a $300k salary. That's a very rare salary in Los Angles, but not a rare home price. Last I looked, only 1.8% of LA's population could afford the median home. Someone up in that income bracket isn't going to want the median home.

Its going to take a while. I still don't expect the market to "break" until 2Q 2007. I also still do not expect it to be a true "buyers market" until Fall 2008. Do note, I place a higher utilization value on having a home than some of my fellow bubbleheads. Many of them note, I believe correctly, that we cannot expect home appreciation in LA/OC until 2011. So there won't be a rush to buy for a long time.

And I believe home prices have been too high for too long. Combined with taxes and workers comp, this means jobs that pay 75k to 150k (Nominally 1.5X median wage to 2.5X median wage) are going to leave LA/OC. Wait a second... Isn't that the best jobs a city can hope to attract?!? Uh oh... this is going to get ugly.

I hope to buy into the south bay... but I now think there is a 50/50 chance I'll be leaving the state in 2 years, not buying in. :( Not by choice, but rather to follow a good job. Hopefully I'm wrong.

Enjoy shopping on Black Friday.
Now to come up for a catchy name for the comming downturn...

Neil