Clearly with nothing more newsworthy to make a front page headline, the Contra Costa Times chose to to run “The East Bay’s Housing Collapse May Not Be Over” as their lead story yesterday. Quite frankly, it’s illustrative of how desperate they must be to sell retail copies of their paper, rather than exhibit responsible journalism or be sensitive to the issues of the community it covers.
First of all, The Times is a bit late to the “party” with their coverage of predictions for possible a “double-dip” in home prices. I’ve been writing about this possibility for months, and I lay no claims to the originality of analysis on this matter. It’s absolutely possible that we could see further softening in prices this year, and we could also see prices in some areas migrate upwards. It’s all about supply and demand in a free market system, and there are a multitude of unknowns about how the supply-demand relationship will play out this year. At least I used sources that are a lot more credible than Zillow.
To run predictions of a “Housing Collapse” on the front page is simply irresponsible journalism that could affect the fragile nature of the local market. Our economic climate is delicate right now as we try to extricate ourselves from the deepest recession in our lifetime. So much of the restoration of our economic strength is based upon consumer confidence, that it is almost immoral to undercut it in a community hard-hit by the ravages of the economy, just for the sake of selling newspapers. The real estate market is one of the most important foundational elements of our community, and we should all be outraged by a community media source that is so reckless with its headline coverage.
The simple facts are:
- Inventories have been in continual decline over the last 15 mos within Contra Costa County — a critical imperative to the recovery of the housing market.
- January 2110 over January 2009 inventory and sales activity data is very encouraging. Things are getting MUCH better.
- The “shadow inventory” of foreclosed homes is concerning, but it will have little impact on some markets, and will remain an “unknown” factor for others in 2110.
- The banks may slowly release their foreclosure properties to market, choosing to “sit” on the loans, rather than dilute the market. They are already doing this in both the residential and commercial markets.
- February has started out as a VERY busy month in the real estate community, and I predict that the market statistics will be VERY encouraging.
- We all need to be “real” about the market. We are NOT going to return to significant appreciation anytime soon. That doesn’t mean that we will not see encouraging improvement.
- As a former President once said, “It’s the economy, stupid.”
