HOW ARE ECONOMIC STATISTICS REPORTED? I BELIEVE THERE IS A NEW ECONOMIC PARADIGM.

Call me naive but I am an American and as an American I believe that the people of this country will in the end prevail. We have been through tough times in this country before and managed to come back successfully. I believe now as with the industrial revolution and the technology revolution there is a creative American mind out there coming up with the next big thing. That's what we do hear, we invent and  then other countries build. We may be going through a paradigm shift but that doesn't necessarily have to be a bad thing.

Hi Lenn -- I had to turn down 3 sellers this past month because of negative equity and they don't want to short sale.  I'm sure it's happening everywhere.  They mortgaged themselves to the hilt a few years ago when credit was cheap and easy.

Are you sure that the 80/20 rule means that we need 80% of the current agents?  I'd flip that... we only need to best 20%. 

And while I see a bottom in the market, unmistakably, I also feel that I am about to see another plunge beginning in about 60 days...  And extending or expanding the FTHB Tax Credit won't change that.  It will only change when the market is ready to change... when people aren't freaked out about their jobs and when they feel that it is safe to buy again.  I am begining to think that will be in four years...

Very solid content.  The only point I want to challenge everyone on is that an "uplifted state of mind" makes a huge difference.  Being positive is part of that.  When someone understands that state of mind it does attract your desires to you. No matter what the economy is a person in an "uplifted state of mind" will prosper.

Lenn, I love this post and the 75 comments it has generated. There is so much spin on any statistics depending on the point of view of the stat giver, that it is more helpful to look at raw data. A mortgage broker friend of mine always looked at durable goods to determine where the economy was heading. I agree with Chuck that a positive state of mind is very important.

Speaking of stats, let's look at the number of real estate agents. How inaccurate a stat is that? How many are there in every state that hold onto their license because they don't want to lose it but do $0 dollars business. How about the ones who do an occasional referral? How about the ones who do one to four deals a year? So on the surface, it looks like we have a lot of agents, but do you even think 20% are really doing much business?

The straw that broke the camel's back was the housing bubble bursting. 

The reason there was a housing bubble was governmental policy seeking to put marginal buyers into homes (fostered by both parties in the Congress, two Presidents, the FED... and the NAR) - combined with lender dishonesty from the bottom to the top of AIG.

But the problem was not just the straw.

The problem was the load the camel was already carrying:  too much public debt (at all levels of government, but especially at the federal level), too much private debt, a negative (until recently) private savings rate, too little willingness on the part of American workers to work in industrial jobs at world-wide wage scales, too little progress on making our schools a place where young people REALLY prepare for this century (instead of the last) AND too little appreciation for our precarious energy supply - coming as it does, in major part, from nations in a basically unfriendly part of the planet.

(The private debt part of this was exemplified by the use of homes as ATM's.)

Until we fix all these things, the middle class (and a "normal" real estate market) are in great jeopardy.

Not to mention the future of the Republic.

The current administration appears to have no clue.  But they are not alone.

Lenn: Two of the most powerful points that you make are: Planning and running your business, so many real estate agents don't have any sort of plan. Second is to be on top of the market and watch for those changes, we have started telling sellers that their price can and just might change while the house is on the market.

And of course, what will those powers that be do?

Woo hoo . . . a two'fer Thursday.  A great read . . . AND I reported a "concern" over Jimmy Choo Bags, the idiot!

I'm amazed that the news media is saying "Oh, the recission, it's over now."  (Let's all break out the bubbling and chant "Happy Days are Here Again!")

What do they think the economy is?  A water faucet with on / off switches??

The problem with statistics is that they are created by economists or politicians or someone else with an agenda. As an economist myself, I can state with certainty that a good -- or even average -- economist can come up with statistics to support whichever position is desired. Most economists have two hands, so they can say "on the one hand, . . , but on the other hand." (A little humor there) That four percent number we keep hearing about is highly suspect. Without knowing what exactly went into it, and over what time period, it has little meaning. But that is not to say that it is not as good a guess as any other prediction. Fortunately, the only predictions that anyone remembers are the ones that come true, and they are remembered mostly because the predictor keeps reminding usof his/her accuracy. The bad predictions are quickly buried and hopefully forgotton. Akron, Ohio

(Sorry if this is a repeated post. I couldn't tell if it went thru OK.)

Lenn - I agree with you - I think that a positive attitude helps, but it has to be combined with hard work and a PLAN!!  And let's add to that integrity and ethics - although realistically, there will always be those who choose to be shady.  I think this industry needs a good cleansing...

I also think that wherever the bottom is, we will be there for a long time and the climb back up will be slow and gradual. 

Always like reading what you have to say!

There is something else interesting here... 

This recession is tagged as having started in December, 2007, yet the econcomy continued to grow in GDP until the 2nd Quarter of 2008... and the decline began in Q4. 

Now they are claiming it is over, yet we haven't had growth in the GDP since 2008 Q2. 

source...

The sad part is that the media is running with it.  There used to be a time when the media acted as a check on the power of government... now they are accomplices.