An elegant white clock featuring 'DANIELLE LAZIER REAL ESTATE LOGO' on a sleek black background.Vivre Real Estate logo

Is the real estate meltdown overblown by the pundits?

July 28, 2008

I know times are tough and I know there is a lot of truth to today's real estate gloom and doom. Yet, could it be that the mass media is overstating the problem and it some ways, causing more through the psychological warfare of the evening news??

Sure home sales and prices are down in many areas, although not in most parts of San Francisco. Sure, foreclosures are up and the blowback from the subprime mortgage crisis may be threatening banks and secondary mortgage lenders, but, according to “Barron’s” (see the link to the story below), there are some early signs the real estate market is trending in a more positive direction—although you may not know it if you rely on the mainstream media for your real estate news.

Some interesting food for thought from the Barron's article:

  • Recent data suggest real estate market pessimism may be overblown. Even economist Karl Case, father of the S&P/Case Shiller Home Price Index, admits many industry pundits and members of the media are ignoring key facts—as demonstrated by their focus on negative year-over-year price figures rather than more recent monthly data. An example: Home prices actually increased slightly in eight of 20 Case Shiller markets between March and April. Instead, the focus of most media reports was on year-over-year figures, which continue to support the notion that the market may not have hit bottom, let alone begun to improve. 
  • Transaction-related indices may be skewed at present by a far larger than normal share of subprime-derived default and distress sales. In the San Francisco Bay Area, for example, more expensive homes (those priced over $721,548) have dropped in price by only about 10.7 percent from their peak, compared with homes priced under $473,711, which have tumbled by 40.9 percent.
  • Even new housing construction numbers suggest an improvement, according to Case. He notes that housing starts, which fell to 975,000 in April from 2.27 million in January 2006, have fallen by similar percentages three times during the last 35 years. Case observes that each previous time this has occurred the market has staged a surprising upturn within a quarter. Only a slide into a recession would temper his optimism about the potential for a similar recurrence of this trend.
  • Check out the full Barron's article by clicking here.  

    Yelp logo
    296 reviews
    View All
    Zillow logo
    176 reviews
    View All
    Danielle Elazier Realtor on Google My Business- image of Google my business logo
    117 reviews
    View All

    Danielle lazier real estate team

    We care deeply about our clients and our commitment to exemplary results. Working with us should be a good fit for you. If you feel our team is the right fit for you and you’d like to talk with Danielle to make sure, contact us today for your complimentary initial consultation.
    Contact Me

    Do You Need Another Real Estate Newsletter?

    Probably not. Yet, in our biased opinion, you should definitely sign up for our twice-monthly email for market insights, webinar invites, local news, gorgeous homes, and more. We never share or sell your information. And, when you’re ready to work with us, please email or call to discuss your plans. We’d love to help!

    Danielle Elazier botanical illustration - 3 different California poppy flower branches. Black and white with line art
    View Full Street Address SAN FRANCISCO, CA 94114 (415) 528-7355 ©2008 VIVRE REAL ESTATE. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. WHILE THIS INFORMATION IS BELIEVED TO BE CORRECT, IT IS REPRESENTED SUBJECT TO ERRORS, OMISSIONS, CHANGES, OR WITHDRAWAL WITHOUT NOTICE. ALL PROPERTY INFORMATION, INCLUDING, BUT NOT LIMITED TO SQUARE FOOTAGE, ROOM COUNT, NUMBER OF BEDROOMS, AND THE SCHOOL DISTRICT IN PROPERTY LISTINGS SHOULD BE VERIFIED BY YOUR OWN ATTORNEY, ARCHITECT, OR ZONING EXPERT. IF YOUR PROPERTY IS CURRENTLY LISTED WITH ANOTHER REAL ESTATE BROKER, PLEASE DISREGARD THIS OFFER. IT IS NOT OUR INTENTION TO SOLICIT THE OFFERINGS OF OTHER REAL ESTATE BROKERS. WE COOPERATE WITH THEM FULLY. EQUAL HOUSING OPPORTUNITY. ALL INFORMATION DEEMED RELIABLE BUT NOT GUARANTEED AND SHOULD BE INDEPENDENTLY REVIEWED AND VERIFIED.
    enteruserclockcross