It Ain't Over "Till It's Over

The National Association of Realtors (NAR) issued a press release on December 11 of last year entitled "The Worst is Over - Existing Home Sales to trend up in 2008."  Yesterday, the Atlanta Journal Constitution published an article on the Business front, above the fold, that shouted "Metro area foreclosures surge."  If you saw these two articles, you're probably wondering "What the heck is going on?"  So, who's right?

I don't know the answer to that question.  But, let me tell you what I DO know.

The NAR is wrong!  That should be evident with yesterday's AJC headline. 

The NAR and their economists based their national prognostication on a single positive indicator - a projected increase in the number of existing home sales in 2008.  Well, that shouldn't be too hard to achieve since the 2007 home sale market was, overall, one of the worst in recent history.  But "national" is the operative word here.

The NAR reports from a national perspective, but real estate is not a national business.  It's a local business.  Almost every market is different.  Thus, the only person who can make sure you understand the market from a proper perspective is your local Realtor.

Many local real estate markets, such as Charlotte, Birmingham and Harrisburg, PA, were not nearly as affected as markets in California, Ohio and Florida.  Even Atlanta was not as hard hit as those.  And there is good news in mant markets across the country.

We are beginning to see increased activity in the real estate market here in Covington, Georgia.  Buyers are beginning to look at homes again.  Sellers are beginning to put their homes on the market.  People are applying for refinancing and new mortgages.  But last week's Covington News also had 25 pages of foreclosure legal notices... the most I've seen since early September of last year when there were 17 pages of notices.  Does that mean the AJC is right?

The AJC is wrong too!  They're right in their facts... "Metro Atlanta foreclosure notices shot to a record high this month...."  "That is up 45 percent from the same period a year ago."  But they're woefully wrong in the way they report those facts, characterizing the news as "... a dismal sign of deepening woes in the housing and mortgage market...."

It is true that 215 U.S. lending operations have gone under since late s006 - primarily sub-prime mortgagers.  It's true that foreclosures are at an all-time high.  But, it's also true that the media seems to take great pleasure in running chills up and down the spines of their consumers.  They have reported so often and so negatively about our housing market that they have frightened buyers, seller and investors away from the the market that was, in fact, the glue holding the U.S. economy together for several years past.

Bottom line is that no one has a corner on the housing market crystal ball.  The NAR doesn't.  The media doesn't.  Nor do economists who work for them.  Economists, whether they work for the overly optimistic NAR or the overly pessimistic media, make the predictions their industry wants to hear.  Economists are like weathermen.  Their predictions are often wrong, but after it rains, they're great at telling you why.  I take them all with a grain of salt.

Is the "worst over?"  Or are we seeing "a dismal sign of deepening woes in the housing and mortgage market?"

Who knows?  I'm just going to watch the Covington real estate market and, with apologies to Yogi, tell you that "It Ain't Over "Till It's Over!"