{"id":24,"date":"2005-12-10T11:17:00","date_gmt":"2005-12-10T18:17:00","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=24"},"modified":"2005-12-10T11:17:00","modified_gmt":"2005-12-10T18:17:00","slug":"when-did-reporters-become-the-gullible-stenographers-of-frauds","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/24\/when-did-reporters-become-the-gullible-stenographers-of-frauds\/","title":{"rendered":"When did reporters become the gullible stenographers of frauds?"},"content":{"rendered":"

Holy smokes!<\/p>\n

The Phoenix region has landed on a list of “extremely” overvalued housing markets<\/p><\/blockquote>\n

But, but but! Of course there’s a “but”:<\/p>\n

but it’s unlikely that the situation will lead to meaningful drops in home prices, several local housing analysts said.<\/p><\/blockquote>\n

Whew! That was a close one!<\/p>\n

Well, not really. The cited text comes from the Arizona Republic<\/a>, reporting alarmist predictions that are based on no actual, on-the-ground experience that I can detect. The ‘researchers,’ “Global Insight and National City Corp., a Cleveland-based mortgage lender,” couch everything they dare to say in the most mealy-mouthed possible language, for that simple reason that any long-range prediction about a particular real estate market is inherently suspect. Our Cleveland mortgage lenders only dare to make mealy-mouth predictions for–wait for it–“299 metro areas.”<\/p>\n

When did reporters forget how to make the Bronx Cheer<\/a>? Isn’t that what Hildy Johnson used to do, in The Front Page,<\/i> when fed a line of bull?<\/p>\n

Here’s a better question. Assuming the absolute mealy-mouthed worst for the Phoenix market, how bad will things get?<\/p>\n

“[W]hen you look back at markets that have declined 10 percent or more over two years, those markets were overvalued by that much or more[.]”<\/p><\/blockquote>\n

That’s choice. What it almost<\/i> says is that the Valley might be at risk of losing 10% of the current market value of homes over the next two years. That is to say, the house that was worth $145,000 in December of 2003, which is now worth $265,000, may only be worth $238,500 in December of 2007. I’ll take bets against that outcome at $100 a head, down to my last dollar. But, even conceding the (unmade) point, the four-year appreciation on the home would be 64%, $93,500 in unearned increment–wealth accrued without having to be produced.<\/p>\n

But what the quotation actually says is this: If it turns out that homes have lost 10% of their value over two years, it’s because they had been overvalued by 10% or more. Translated into English, it’s just stupid. It sounds tautological, but it isn’t, actually, because it introduces a false idea of causation.<\/p>\n

The value of a thing is what that thing will Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Holy smokes! The Phoenix region has landed on a list of “extremely” overvalued housing markets But, but but! Of course there’s a “but”: but it’s unlikely that the situation will lead to meaningful drops in home prices, several local housing analysts said. Whew! That was a close one! Well, not really. The cited text comes […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-24","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-general","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":3917,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3917\/mortgage-market-week-in-review-6\/","url_meta":{"origin":24,"position":0},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"August 15, 2008","format":false,"excerpt":"Well, it\u2019s Friday again, and as one of the few remaining Fridays of the summer, I hope you can get out and enjoy the weekend (and hopefully the weather where you are will allow you to!) 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