On July 5th, Steve Harney published his top five important developments in real estate for the first half of 2011.
1. The government is making an effort to limit its involvement with the lending business with talk of closing Fannie Mae and Freddie Mac and mortgage reform in the form of Quality Residential Mortgage (QRM) guidelines.
2. After adjusting for the tax credit boom-let of 2010, negative sales volume data is tempered by increased pending sales.
3. Sales prices are stabilizing.
4. Foreclosures have been delayed by legal and procedural issues. Foreclosures are expected to resume, in large numbers, soon.
5. Everyone’s screaming, “buy now!” (except Rona!)
I’ve seen and heard Mr. Harney. He is very engaging and explains things clearly. I don’t always agree with how he uses statistics or with his conclusions. But, he is among the most influential writers out there. Therefore, he deserves a hearing here at BREN.
What is your take on these top stories? Do you think they are the most important stories?
The reason that I do not participate in the market discussions here at BREN is that any snapshot of the market is not going to tell the whole story. So when the Massachusetts Association of Realtors or the Warren Group do a monthly review of the real estate market, I take it with a grain of salt. They are going to see what they expect to see in this tiny snapshot of market data. I believe that we cannot see the forest for the trees when we look at such a large sample of housing (all of Massachusetts) over such a small time frame (one month.) What we see and hear is the spin of the pundit handing us the information. The data is even more useless when we look at national figures and try to make sense of it in Massachusetts.
The five stories above also need to be looked at in relationship to one another. Stories number two and number three speak to a market that is holding its own (however dubiously.) Number four says that the foreclosure inventory is right around the corner and prices will head down again. Hummm…. Now isn’t that going both ways at once? Doesn’t the shadow inventory story contradict the message that the market is recovering?
Wouldn’t it be better to buy when the prices go even lower?
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