Chamberlin Supplemental

As a supplement to the recent article about the SDDT’s executive editor, please enjoy this selection of George Chamberlin quotes (which I collected for a while last year). I recall some even funnier and more damning quotes from before and shortly after the housing market peaked, but unfortunately I didn’t think to start collecting them at the time. Nonetheless, there are still some gems to be found below.

5/24/06 – April was surely going to be the month that the housing market caved in, right? Well, bad news for the bubble believers. The government reported this morning that new home sales rose by 4.9 percent last month to an annualized rate of 1.20 million units, the highest level so far in 2006. Prices were also strong, rising 2.8 percent over the previous month. And, the supply of homes for sale fell from six months to 5.8 months. Of course, analysts scrambled to discredit the report. The columnist on the MarketWatch Web site said, "The government cautions that its housing data is subject to large sampling and other statistical errors." Maybe it could just be that consumers still prefer housing over other investments.

6 /20/06 – The experts got it wrong… again. The government reported this morning that new home construction in May rose by 5.0 percent to an annual rate of 1.96 million units. That’s just about 100,000 more than all the geniuses were forecasting. Here in the West, housing starts rose by a staggering 15 percent. The guys on CNBC this morning actually suggested that homebuilders were pumping out houses as fast as they can before the market crashes. When will they get it? Americans want to own the home they live in.

6/26/06 – Once again the real estate market has defied the experts. Despite all the wishful thinking, new home sales remained strong in May, especially in the West. The Commerce Department reported that sales rose by 4.6 percent nationwide and 5.3 percent in the West. Even more important, the inventory of new homes for sale fell from 6.4 months in February to 5.5 months in May. Of course, the national media continues to scoff at the news.

6/27/06 – The National Association of Realtors said sales of existing homes rose by 0.7 percent in the West during May. That counters the U.S. trend, which saw sales of previously owned homes decline by just 1.2 percent. David Lereah, chief economist for the NAR, said, "We’re right on course for a soft landing." Lereah — hardly a cheerleader for the industry — then added that the group has its "fingers and toes crossed."

8/8/06 – Speaking of bubbles, the folks at CNBC just won’t let go of the idea that residential real estate prices are over-inflated. Yesterday one of the talking heads asked an economist from Bank of America what will happen to the economy if real estate suffers a hard landing rather than the expected soft landing. Fighting back a case of the giggles, the economist said, "That’s just plain silly."

9/27/06 – It may be a bit early to write off the residential real estate market. The Commerce Department caught most people by surprise this morning with a report that new home sales rose — that’s right, rose — in August by 4.1 percent. It was the first increase since March. And, in inventory of unsold homes declined.

10/26/06 – The desire to own a home has not diminished.

12/28/06 – The median price for a home sold last month was $218,000, 3.1 percent lower than a year ago. That raises the question: Why is a 25 percent drop in oil prices a correction, but a 3 percent decline in home prices evidence of a bubble bursting?

The quotes speak for themselves, for the most part, but I can’t help but call attention to a couple of things. First, a little context on some of the statements about sales volume. The "desire to own a home has not diminished" quote from October 26 occurred at a time when home sales volume was down 35% from 12 months prior. Exactly what metric was George using to determine that the desire to own a home had not diminished at that point? Similarly, regarding the 9/27 quote, while national home sales rose by a whopping 4.1% for the month in August — "that’s right, rose" — Chamberlin somehow failed to note that San Diego home sales were still down 33% from the prior year. Wouldn’t that be the more germane statistic in a San Diego local newspaper? I guess not.

Second, yes, as unbelievable as it may seem, Chamberlin actually did characterize David Lereah as "hardly a cheerleader for the [real estate] industry." Doubters can check here, though a subscription may be required.

Finally, you can see that Chamberlin’s recent accusation about the UT, to which I dedicated the prior article, is just the latest iteration in a long and rich history of fabricating conspiracy theories about the media’s desire to destroy the housing market. My guess is that future editions of Money in the Morning will find that the real estate bust was caused entirely by this anti-housing media cabal. The housing bubble that preceeded the bust will likely not be mentioned.