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San Diego Daily Transcript executive editor George Chamberlin has once before been featured on these pages for making misleading statements in his “Money in the Morning” column. It is, unfortunately, time for a follow-up.
Last Friday’s edition of Chamberlin’s Money in the Morning (subscription required) included the following paragraph:
Speaking of real estate, I finally found a Wall Street analyst who thinks it’s a good time to buy a house. “We believe many recent ‘bad reports’ on housing, rather than suggesting a worsening collapse, merely reflect what has already happened. Although reports will remain volatile, evidence is mounting the worst in housing is already behind us and a bottom is nearing,” wrote James Paulsen, chief investment strategist at Wells Capital Management. That’s one guy you’ll never see on CNBC or hear about from the UT.
I don’t even know where to begin with this one. There are certainly real estate bears to be found in the investment business, but on the whole, Wall Street analysts have for years tended strongly to err on the side of over-optimism when it came to the housing market. This should not come as a big surprise, considering how many of these same analysts are employed by firms that have earned jaw-dropping profits from the mortgage securitization boom.
If Chamberlin is having trouble finding Wall Street analysts who are sanguine about housing, he’s just not looking.
But it’s the last sentence of that paragraph that really blows me away. The suggestion that the Union-Tribune refuses to quote bullish housing pundits is absolutely ludicrous. While housing optimists don’t have the analytical monopoly they once did, the fact is that they still get plenty of airtime in the U-T.
The newspaper’s latest monthly housing data roundup, to cite the most recent of a long stream of examples, notes that according to real estate agent Chuck Smiar, “the housing market is flat — not falling.” This is the same Chuck Smiar who famously proclaimed in December 2006 that “If anyone is going to buy, they better buy now, because things are going to turn around.”
OK, I will admit that Smiar’s attempts to frighten fence-sitters into action are not actually famous, although it is my fervent hope that it someday will be. The point is that Smiar is clearly the type of person who thinks it’s a good time to buy a house. And yet despite his optimism on the housing market, and despite the questionable advice he dispensed last December, he managed to be quoted in the very latest state-of-the-housing-market article in the U-T.
Just to be sure that the appearance of a housing bull in the U-T‘s May housing market write-up isn’t a fluke, let’s have a look at the April edition. The first quote of the article comes from DataQuick’s John Karevoll, who says, “It looks to me as if the market, at all levels, has ratcheted itself back a notch but is still stable …There is nothing I can see that looks particularly ominous.”
I’m not sure what Karevoll was seeing in April, but it’s pretty clear that he wasn’t looking in the direction of skyrocketing foreclosures, extremely weak demand, inventory oversupply, lender tightening, record unaffordability, or the slew of exotic loan resets in store for 2007. Other than that, I guess everything looks pretty rosy.
Then again, Karevoll didn’t come right out and tell readers that now is a good time to buy a home, so I suppose Chamberlin gets by on a technicality with this one.
However, later in the same article we hear from real estate agent Calvin Goad, who established his bullish pedigree in July 2006 when he informed the U-T that “it is a good time for the buyer to jump into the market.” San Diego single family home prices are down 6.3 percent since Goad made that statement, according to the latest release of the Case-Shiller Home Price Index, so I can only assume that Goad thinks that now is an even better time to jump into the market. Yet he still managed to make it onto the pages of the U-T.
That covers the prior two months, but rest assured that real estate optimists appear in the U-T on a regular basis. Whether they are right or wrong is a whole other topic, but Chamberlin’s accusation that they are being swept under the rug by the Union-Tribune is complete nonsense.
— RICH TOSCANO