HURRICANE KATRINA will lift home prices across the country, the National Association of Realtors declared this week. News outlets that picked up the story passed it along wholesale. MarketWatch.com presented a news release rewrite at the top of its home page with its usual screaming headline.
It was left to real estate bloggers to provide context. The association's conclusions seem reasonable: the need to rebuild hundreds of thousands of units will cause a spike in demand for building materials, which will push up construction costs. The storm's impact will restrain mortgage rates. And with inventories already tight nationally, prices can't help but rise, according to David Lereah, the group's chief economist.
"The 'general tight inventory' Lereah speaks of is rapidly ending," counters David (no last name given), who writes the Bubble Meter blog and who pointed out that the association was hardly a disinterested observer of real estate markets. Bubble-watchers abound in blogland. There are the Housing Bubble Blog, the Boy in the Plastic Housing Bubble, the Global Bubble Trouble Blog and many others. Most of those not operated by Realtors or others with an interest in ever-rising prices - and even some that are - tend to be skeptical of the market prognostications of Realtors.
The housing bubble bloggers will continue to raise bubble awareness and criticize the bubble cheerleaders like Lereah.