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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: larry who wrote (4792)	8/28/2002 4:46:27 PM
From: David Jones	Read Replies (1) \| Respond to of 306849

Sorry this post falls on you gamer but the last few posts are crap. 30-70%, hell you guys are dreaming of a depression. If this were stocks one would say your bucking the street. Plus this is NOT Japan. here: list.realestate.yahoo.com Wednesday August 28 9:02 AM ET Why Housing Bubble Reports Are Full Of Hot Air Blanche Evans, Realty Times Columnist Is there a housing bubble? Economic experts from FED chairman Alan Greenspan to the National Association of Realtors to the Wall Street pundits all closely watch housing. The media, from local papers to the Wall Street Journal, are pounding on the question of whether or not a housing bubble is here, on the way or already past. So is there a housing bubble or not? Well, that depends. If you believe everything that happens in San Francisco over the last two years will happen to your area, then you have plenty of reason to get hysterical. Or do you? According to Dr. Mike Sklarz, chief valuation officer for FNIS' Analytics Division, hysteria is just what the media wants. "They want to sell papers, and scary things sell papers," he scoffs. "A housing bubble is another opportunity to scare people and get them to buy papers." Dr. Sklarz says hardly anyone in the media knows what they are talking about when it comes to housing, bubbles included. Why? "They don't have the data," he says. "Most of what they are saying is anecdotal - what they are hearing from others." Even the median prices for homes which form the foundation for local, regional and national housing statistics and widely quoted by the NAR, Greenspan and others are suspect to Dr. Sklarz. "Real estate data is way too broad to understand the prices. They (NAR) get the median prices for a big area (MSA) like L.A., or San Diego or New York. You'll get a number, all right, but what does that number mean? The whole Bay Area is a combined number - what does that tell us about the hundreds of markets in the Bay Area? We are talking about different-sized homes with a lot of different metrics, and there are different leads and lags within the individual neighborhoods. The Bay Area may be up 10 percent, but a high-end market like Hillsboro can be down 30 percent from a year ago." At the heart of the housing controversy is the notion that housing is a similar investment instrument to stocks. "Homes do have an investment component," says Sklarz, "but they also provide a service component." Another mistake made by many economic pundits in the media is that they will look at housing in a volatile area, like San Francisco, extrapolate housing data and then assume that the rest of the country is behaving the same way. According to Dr. Sklarz, housing typically follows a steady upward trend in alignment with rising salaries. A housing bubble is defined by a change or deviation, generally on about a seven-year curve. For example, it may take an area seven years to peak, then housing prices will drift down for three or four years, or go sideways, and then will rise higher by the seventh year. Can a housing bubble be predicted? Sklarz says that there isn't enough historical data to go by, which is one of the reasons he and his team at FNIS' Analytics Division are devising new mathematical formulas to measure housing price behavior, and creating new software that will give "people the data - objective real data." ....snip....