San Diego Housing Bubble News and Analysis

Only one question of the experts.

When's the last time you sold a house?

If they haven't sold one in the last 12 months, their opinion should be questioned.

Unless they are on the street participating in what's actually going on, they're just guessing.

Jim the Realtor

Often, the reporters do interview realtors, but they get so much BS! Realtors will say, "People want to live here, so they prices will keep rising", or "They're not making any more land so prices will never go down", or "The economy is good so prices can't drop". I think realtors are worse than the economists in saying things which are simply not supported by the facts.

Now if they would interview you Jim, we'd get a straight story. Have you ever contacted a reporter? Perhaps you think it's hopeless.

I've made an effort, though I don't push it. You'll see me quoted occasionally, but it's usually the toned-down version.

Earlier this year a reporter for the North County Times told me he wouldn't print the obvious trend of a changing market because "he was tired of being wrong all the time".

The U-T could blow the top off this story, yet you don't hear a peep out of them. I'm not sure it's due to them wanting to protect their real estate advertisers. I think this whole world is more concerned with CYA than risking being bold and telling it the way it is.

Jim the Realtor

Why is the RE industry so focused on rates?
Does anyone ever think about actually paying off the home anymore instead of the monthly payment?

My website tracking Temecula and South Riverside County

Bob Visini, vice president of marketing at Loan Performance, LLC in the Bay Area, and Will Carless talked about the impact of resetting ARMs. Will concluded that "some 50 percent of money borrowed through mortgages in the region will be wrapped up in reset interest-only or negative-amortization loans by 2010...if home prices rise reasonably over that period -- and lots of people think they will -- many of those borrowers will be absolutely fine." But what happens to those borrowers if home prices keep falling? Even if home prices stay flat or rise, what will be the impact on our economy when "the holders of at least a quarter of all the borrowed money for housing suddenly lose several thousand dollars a month in disposable income?" Look at what happened when gas prices rose, and multiply that several times over.

A long question, but it gives the reporter the background for the question, and she can choose to just ask the last sentence.

Are you an expert at selling houses or an expert at anlyzing the future of the market?

Can you name 6 indicators that you look at to determine the future direction of the housing market - other than median price, sales and inventory?

sduuuuuude, thanks. Can you elaborate, i.e. is there a certain answer you're looking for?

"Dude, where did you get that jacket?"

VCJIM, ??

I offered to send Ms. Wedner a list of questions, and her response:

Thanks for the offer to report my stories for me. But as a veteran, respected reporter, I prefer to do my own work. You should try to do some freelancing on this subject. You seem to have a great many sources and ideas and opinions---give it a try.

Diane Wedner

Sorry, I couldn't resist.

Should wouldn't even look at your questions? I think that's a clever way to build bias into the media...fein ignorance by denying access to true information, or at least questions leading to true information. I HATE the media. HATE HATE HATE. Very few things in this world I truly despise; it's one of them.

I think you've found your calling for a career, Powayseller- freelance writer. I think that a reporter should play devil's advocate a bit more and ask more pointed questions that require a well thought out answer. Softball questions such as, "how does the housing market look to you?" and then not following that question up, doesn't cut it IMHO. Here's what a typical phone call might look like:

Ms. Wedner: So, Joe Economist, what's your outlook on the housing market so far this summer?

Joe Economist: Well, I think that all indicators point to a leveling off in median price, but it's nothing to panic about...we are just getting back to more normal market prices.

Ms. Wedner: But isn't the median price considered an infererior indicator because it tends to lag behind true market conditions? And don't you see some potential concerns with the increasing inventory of homes and the latest population figures from the US Census that show San Diego is actually losing people?

This is just an example of how a reporter can actually put a little elbow grease into it and dig for the scoop on a story, rather than just lob softballs. Keep in mind, I was able to come up with these questions in about 5 minutes, and I am a ham-and-egger when it comes to this stuff! Ms. Wedner is a business analyst and it is her JOB to do this! Is the LA Times hiring?

powayseller -

My idea stems from the fact that they sometimes ask the right question of the wrong person. i.e. they talk to agents about their opinion of the future of the market, when in fact agents aren't necessarily qualified to talk about that. They are qualified to talk about how to sell a house in today's market.

Asking an expert what they have considered in their analysis of the market shows the extent to which they have analyzed the market.

My questions are intended to find the right expert to ask.

If someone says "The trend in the median price is up, so I predict it'll go higher, they are a moron." They have considered only the variable in question and don't understand the cause and effect in the market.

If they say "I have considered the number of ARMS due to reset, Japanese monitary policy and its effects on interest rates, etc, etc." then they understand the cause and effect of different issues and how they apply to the question at hand.

In my opinion, this is what makes Rich an expert.
He understands cause and effect in the market, not just graphs.

Hi all,

I'm new to this site so take it easy on me. Along the lines of what should reporters ask there expects...I think it would be helpful if wee could keep track of past news articles. To that effect I have a couple that quote LAY. What she said in the first article and her recent "turn" give some insight to her view of current market conditions.

Panelists see housing market slowing North County Times - North San Diego and Southwest Riverside County News - NCTimes_com - Californian_com.htm

Note the last paragraph in light of recent increases in inventory.

"Price increases will slow, and may even be flat in some areas of the state, said the speakers, including Leslie Appleton-Young, chief economist for the California Association of Realtors. However, they said, economic fundamentals state and nationwide appear strong enough to prevent a downturn. And San Diego County is likely to put in a solid performance, although there's reason to worry down the road.

Nearly all the others speaking said emphatically that there is no real estate "bubble." The lone dissenter was Alan Gin, a USD professor of economics ---- but even he said he doesn't think it's going to burst now "or in the foreseeable future."

"There is one thing you need to get declining prices ---- just one ---- you need too much supply," Appleton-Young said. "You need more homes for sale than there are buyers."

And of course her (LAY) latest take on the market...

Housing Expert 'Soft Landing' Off Mark - Los Angeles Times.htm

"The Realtors association last month lowered its 2006 sales prediction from a 2% slip to a 16.8% drop. That was when Appleton-Young first told the San Diego Union-Tribune that she didn't feel comfortable any longer using "soft landing."

"I'm sorry I ever made that comment," she said Thursday. "When I get my new term, I'll let you know."

If there's one group in California still unreservedly bullish on real estate, it might be the throngs lining up to take the licensing exams.

The state Department of Real Estate recently reported that the total number of agents in the state passed 500,000 in May for the first time. That's one agent for every 55 adults in the state.

Appleton-Young had no qualms about predicting a hard landing here: "We're expecting a fairly significant shakeout."

The shakeout could be very ugly depending on how many transactions are not just bad business but illegal/ criminal. Unfortunately those stories won't be newsworthy until people start losing their homes.

I applaud Ms. Appleton-Young for admitting her previous mistakes...which is not easy to do. I think she is starting to get a real grip on the ever-growing concerns that everyday people like us are having with housing here in SoCal. As for the other bullish economists, it's at the point now where I almost feel sorry for them. They remind me of the desperate tobacco executives who denied until the very end that cigarette smoking was bad for one's health.

I e-mailed back to Ms. Wedner as follows

A true investigative journalist doesn't blindly copy what other people say. They question its validity. The stuff these economists told you doesn't even make any sense. You are too offended to even consider that you have been duped.

A real reporter of the likes of John Stossel or Danielle DiMartino of the Dallas Morning News asks a lot of questions, and doesn't take "experts" at their word.

I can see why the LA Times is losing readership. The "reporting" that you describe is more like a 6th grader taking notes in a class, than a college senior working on an investigative thesis.

I have investigated this story, and that's why I know much more about this than you. I tried to help you. Your defensiveness was an obstacle though, so I have to let it go.

Next In Line, welcome! Why did you think we would not "take it easy" on you? Several new posters have said to take it easy, so I'm wondering if we're really rough on people... What questions should a reporter ask? Are you also saying that we should keep track of reporters' stories? Do you have any examples from U-T writers or others? You could start a thread; it would be interesting to see some of the old stories, and how they compare to today.

PS I only wish the reporter would call me... I think that the data that John presented would be a very interesting piece of information to pass on to that reporter.

Also I would ask the reporter about the stark decline in number of sales, the drastic reduction in revenue predictions from ALL of the large homebuilders for the next year, and the substantial increase in just about EVERY leading statistic there is regarding a slumping market including a rise in NODs, foreclosures, cancelled, expireds and withdrawn listings.

powayseller,

Thanks for the welcome. It was more of a joke - I like this blog because there are some serious thinkers and it seems some industry people. Some of the blogs I've seen on this subject are total rants with little info, analysis or critical thinking. After all we (bears) could be wrong or only half right about a downturn. I'm not up on SD, I live in OC and I think we are "Next in Line" for some yoy declines. I will keep my eye out for articles - old and new. One last thing I got interested in this topic since 1/2 to 2/3 of everyone I know have gone into real estate for part or all of their income so I get some inside info and hear a lot of sales slogans.

I look forward to your input, Next in Line.

PS, I think you have started a great thread. I admire you for taking the time to write to reporters and journalist to open their minds.
You are doing this for so many people that are no even aware. You could be changing their lives. I am sure there are thousands of people that do not understand ARM or underestimate it, many other think that houses will appreciate forever. The sooner this madness is gone the less people that will be affected.

I however have, I hope, a constructive feedback. I hope you will not take it as an attack. I think you need to improve your manners (at least in writing to people that disagree with you). Even if the person is a jerk you have to be better person and make your point without offending. In this case Comparing the reporter to a 6th grader will not make her listen to your feedback. I do not know how you wrote to her in the first email but if the tone was the same, attacking her for her bad job (excuse me if I am wrong- I am guessing that was your tone) will not help her to be open to listen to you. In case of a blog I think we can be more lose - a joke here and there or a comment born from frustration - although I still prefer to keep certain politeness level but there are other instance that you need to follow certain protocol.

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If you accept a suggestion, I would have approach a journalist as reader that has been following the market for X months, experienced in person the selling of your house and are aware of houses that are sold at less for what they were purchased, plus have done a lot of research on the topic that has make you consider yourself maybe not an expert but person very educated on the topic (for sure more educated than an caverage seller or buyer or potential seller or buyer) . Plus given that you do not have a job related to the industry and will not be affected if the bubble burst or not (which I think is true, even if you buy your house at the same price in 5 years, you won’t loose money, true?) you do not have any bias - that some realtors or economist might have when reporting.

Based on your research you think there is data/analysis that is not being properly reported or being reported at lot and that you would love to hear the “specialist” take on certain questions like (and you can list your questions)
*****************

I agree with you that is a journalist’s job to research and ask the tough questions, and it is frustrating that their answer is “why should I refute if they are the experts”, I understand if they are interviewing Einstein but in RE they could do a simple google search on housing bubble and more than a million links will come up with many blogs explaining in basic English why a there IS a bubble in RE especially in California.
I just think that your tone and attack approach is the factor that impacts negatively and causes people to be more defensive than collaborative.

Regarding your initial post I have a question. Why do say Sony has left? Actually Sony moved their HQ from New Jersey to San Diego on March 2004. Why I still do not know, but a lot of people that move bought during the time when inventory was at is lowest and the last thing they want to take about is prices not appreciating or declining. Maybe you are talking about a factory line?

kiki, great idea! I will definitely change my approach with the journalists, because they are just uninformed. But the economists are another story... No slack for those guys, since they are *expected* to know better. Thanks for your ideas.

I made a mistake with Sony - I meant to say RCA? It was a TV factory in Rancho Bernardo.

Kiki, I should tell you that when I first started writing reporters, I was very nice. My thinking was that they just don't know what's really going on, and I would be the nice guy and tell them, and then we would start seeing better stories come out of them.

But after months and months of market declines, I have lost my patience with them. So with Ms. Wedner, I really took her on. But I have dozens of e-mails on my computer written to various newspapers, including the U-T, which are VERY nice and informative, in the manner you proposed. I'm so fed up with shoddy reporting. Maybe I should just take my original e-mail to KPBS and the U-T, written in Dec. 05, and copy THAT to the reporters.

i guess i understand you. i guess that if i try many time at some point the patience is gone.

i hope you find a journalist that will listen to you and your ideas, as i said before, by informing people you can change many lifes!

I have to defend Powayseller here. I've also noticed a change in her tone from earlier posts. I guess you can bang your head against the wall only so many times before you start to get a little honery.

Sometimes we have to remember that we are human and show some emotion...especially when things don't change from trying to be civil, or politically correct. I personally don't think we should apologize for showing some emotion once in a while. It's not as though PS was coming across like Michael Savage or Howard Stern. Making a reference to a 6th grader was clearly done to stir the pot, to shake things up a bit. And I don't blame her for doing it.

Thanks rankandfile, I do try to stir up the pot. But I need to learn to be strong without alienating people.

Powayseller, I love your style, maybe because I have the same problem you do with "experts"
It's like having to tell a doctor or nurse to wash their hands, it's different than telling my kids.
Maybe you do need to alter your approach when dealing with the public, but please keep up the good work here and say it like it is! Thank you!

I agree PS... Dont change your style. I think you are especially effective...

Perhaps you should call VOSD because I think you would do very well there... SERIOUSLY..

Thanks rankandfile, I do try to stir up the pot. But I need to learn to be strong without alienating people.

PS, why not make your own web site? If someone doesn't like your content then they just won't come back. It's *your* site and you can say it how you want to - rude, kind, whatever. On a shared forum like this you have to consider others and be civil. We've seen what happens when these rules break down.

I think I recall you saying one time that you're from a computer science background. If so, the website should be particularly easy. If not, and need a little help then you can always ask the forum. There are tons of computer types here, including me.

I guess there's the question of what your website will contain, but that's another issue. Please, don't do another blog. This "blogosphere" thing is getting totally overblown!

What's VOSD? I don't want to start my own website. I like researching and writing when I feel like it. When my kids need the computer for homework, I need to get off. That's how I like it. A business owner asked me to consult for him, so I am working on a proposal. I teach piano too. Thanks for the ideas, though, but I am more interested in economics and analysis/research than in hosting a website. I will ride on Rich's coat tails on the website part.

First off, if I EVER blew off a line of discussion on my work with a comment like "As a respected appraiser I prefer to do my own research" I could fairly expect to lose a lot of credibility. That's a pretty condescending response to someone who's asking serious questions. That's at least the second time this reporter has responded like this and I am not at all impressed with her ethical performance. As with us all, it doesn't matter how great she was 2 years ago or 30 years ago - none of us are any better than our last piece of work. It is the people who cite their experience rather than address the substance of the question whose work is most suspect.

This is not to say that a journalist should allow themselves to be led around on a leash, but they should keep themselves open to leads on their story and be willing to use their own research to verify. When it comes to the important stuff, I never blindly accept what someone tells me about something I'm working on - that's what verification is all about. But I also don't just outright dismiss a piece of information because it's not from one of my usual sources. There's no such thing as too much information.

If a reporter is too burned out to look at both sides of their story then perhaps it's time to move on to selling classified ads or something that doesn't require objectivity.