Glenn Beck Mocks the Realtors' Chief Economists

Glenn Beck mocks the current and former chief economists at the National Association of Realtors, Lawrence Yun & David Lereah for the their history of bad predictions.

Top Economic Issue: Home Prices or Gas Prices?

Which economic issue is this "nation of whiners" more concerned with, home prices or gas prices? Here are the GoogleFight results:


Of course, this says nothing of which direction people want prices to go. Homeowners probably want home prices to go up. Renters should want home prices to go down. Environmentalists should want gas prices to go up. SUV owners almost certainly want gas prices to go down.

To try to get the most accurate GoogleFight results, I first pitted several synonyms for each issue, then chose the most popular ones. Of "home prices," "housing prices" and "real estate prices," "home prices" was the most popular. Of "oil prices," "energy prices," "gas prices" and "gasoline prices," "gas prices" was the most popular.

The State as Mortgage Lender

From the International Herald Tribune:

In a country that holds itself up as a citadel of free enterprise, Washington has morphed from being the lender of last resort into effectively the only resort for home loans for millions of Americans engaged in the largest transactions of their lives.

Before, the government's more modest mission was to make more loans available at lower rates. Now it is to make sure the loans that matter most to middle class Americans are made at all.

The new reality is scorned by libertarians and conservatives, who fear intrusions by the state in the market, and by populists and progressives, who rue a society in which education and housing increasingly rest upon the government's willingness to finance it.

"If you're a socialist, you should be happy," said Michael Lind, a fellow at the New America Foundation, a research institute in Washington. "But you should really wonder whether you want people's ability to pay for housing and college dependent on the motives of people in Washington."

Why is this happening? Much of the private money that once surged into the mortgage industry has fled in a panicked horde, leaving most of the responsibility for financing American homes to the government-sponsored Fannie and Freddie.

Two years ago, when commercial banks were still jostling for fatter slices of the housing market, the share of outstanding mortgages Fannie Mae and Freddie Mac owned and guaranteed dipped below 40 percent, according to an analysis of Federal Reserve data by Moody's Economy.com. By the first three months of this year, Fannie and Freddie were buying more than two-thirds of all new residential mortgages.

Of course, Fannie Mae and Freddie Mac are technically private businesses now, but they are businesses that politicians are inclined to bail out. This implicit backing of the government acts as a subsidy for homeowners.

Case Shiller Index Way Down; Washington, DC Area Down 15.4%

Price continue to fall in the the bubble markets across the United States. The growing number of foreclosures, tighter lending standards, large inventory, weak home sales and rising mortgage rates are pushing prices down.

The Washington, DC area continued to experience price declines. According to the Case Shiller Housing Index prices declined 15.4% between May 2008 vs. May 2007 in the Washington, DC area. The monthly price decline was 1% for May.

The housing bust is not over.

Chicago Real Estate Prices

Click on the image to see the full-sized graph of housing prices in Chicago, Illinois.

Source.

Flashback 2005: Neil Barsky Asks "What Housing Bubble?"

From July 28, 2005—exactly three years ago today. Neil Barsky, writing in the Wall Street Journal, insisted there was no housing bubble.

If you want to be scared out of your wits these days, you basically have two choices: go watch Steven Spielberg's latest, or listen to the hysterical warnings of economists and journalists about the imminent popping of our so-called housing bubble. Robert Shiller, the ubiquitous Yale economist, says home prices could fall 50% from their peak. Taking things a step further, The Economist recently went so far as to call the global housing boom "the biggest bubble in history."

In a free country, it is fair game for the media and economists to scare homeowners with words of gloom and doom, however knee-jerk, consensual and misguided they may be. But housing is a serious business; for most of us, it is our most valuable asset. For generations of immigrants, home ownership has represented the realization of the American dream.

The reality is this: There is no housing bubble in this country. Our strong housing market is a function of myriad factors with real economic underpinnings: low interest rates, local job growth, the emotional attachment one has for one's home, one's view of one's future earning- power, and parental contributions, all have done their part to contribute to rising home prices. Over the past quarter-century, there has been an explosion of second-home purchases, a continued influx of immigrants, and a significant reduction in existing housing inventory through tear-downs. Not all of these trends are accurately reflected in the unending stream of data published daily. Home prices on average have risen at a 6% annual pace since 1999, and 13% over the past year.

The summer of 2005—when he wrote the words above—was actually the peak of the housing bubble.

Congratulations, Neil Barsky! I hereby award you the James K. Glassman and Kevin A. Hassett Award for being completely unable to recognize an asset bubble. Keep up the good work and perhaps you can become a senior fellow at the American Enterprise Institute, too.

Flashback 2005: Was It a Boom or Bubble?

Googlefight results posted on Bubble Meter on July 28, 2005:


Googlefight results three years later:

Private Residential Fixed Investment Over the Past Decade

You can clearly see the effects of the housing bubble decline starting in 2006.

Are You Fed Up? Are you Against the Housing Bailout?

Are You Fed Up? Are you Against the Housing Bailout?

Then check out: Fed Up USA

Short Sale in Silver Spring, MD: 30% Real Dollar Decline from 2006.

The number of short sales and foreclosures available for purchase is increasing in the Washington, DC area. Here is one short sale from the Kemp Mill neighborhood which is in Silver Spring a few miles outside of the beltway. It is located at 908 HYDE RD, Silver Spring, MD 20902.

The Maryland Property Search shows this 3 bedroom house was purchased in September 2006 for 459,000. Now almost two years later it is being sold as a short sale for 340,000. Which is a nominal reduction of 26% and a inflation adjusted decline of over 30%.

MLS #: MC6811928.

Prices continue to decline in the Washington, DC area as foreclosure activity increases, mortgage rates rise and the general economic situation declines. This housing bust is not over yet. Expect continued price declines over the coming years.