Is the glass half full or half empty?

June 13, 2008

After reading some of the many negative articles that have been written since my last entry, it occurred to me that we quote from some of the same statistics.  However, the naysayers quote only what is negative, builders and home owners having a tough time and how the market compares to previous markets.  Yet, if any of us in the industry, and now more outside of the industry, spot light improvements and opportunities in the market we are labeled as propagandists.


This isn’t to say that we shouldn’t keep in perspective past markets, but to inform based only on how the current market compares to the past without including current performance is, I feel, disingenuous.


Would you even listen to the news if it only mentioned how the stories statistics related to the year before?  If the weather broadcast for the week only stated that the temperature would be 5 degrees warmer than last year, but didn’t tell you what the temperature would be for the week.  How about the news caster stating that “Crime is up 6% over last year”.  With no mention that actually all crime was down, except auto thefts.  Would this be acceptable as a complete story?  Would you even listen after awhile when you began to realize the missing information in the stories?  So, why listen to those who say that the Portland market is declining.  When in fact, out of the 12 regions of the Portland Metro area only 2 are showing signs of depreciation.  Compared to last year yes, the median sales price for May is down 3.2% however, it is up from April ’08 4.5%.


Acknowledgement of the opportunities within the market isn’t a denial of the current market slump.  Of course, the market is down from last year.  No one argues that.  Sales are off by over 30%.  It is also up month over month since December.  May’s sales in the Portland Metro area where up 17.8% over April.  I am criticized because this is a seasonal trend and so, this fact is irrelevant.  However, if you listen to those who are telling only the negative about the market.  How would you even know this is happening?  Seasonal or not?  With all this negative press, unless you are in the industry you would never realize this. The facts are that rates are at historic lows again and prices have corrected back to an affordable level.  To say that the market is good and it is a good time to buy again does not ignore what the current conditions are.  It clearly informs those in or considering getting in the market that conditions to buy are great.  You hear that it is difficult to get financing.  Yes, it is compared to the last couple of years, but recent improvements from Fannie Mae and FHA allow home buyers to still get 97% financing and there are even still products for 100% and stated income financing.  However, all you tend to hear is how difficult is to get financing.  How does that statement and the like inform or help anyone?  Builders are selling homes at or below cost to move them.  Isn’t that an opportunity that is worth looking into if a buyer is considering a home?


You decide who is churning out propaganda and who isn’t.  There will always be those who view the glass half empty and those who view it half full.  Obviously, I see it half full.  The reality is, we all have to adjust to this market and some of us are having a tough time.  No doubt, there will be more bad news which will be exploited by those that enjoy doing so.  However, to just resign to the fact that things are bad and ignore all that is positive, is foolish.  Moreover, to try and convince people that they shouldn’t invest without full disclosure of all the market offers is disingenuous to say the least.  I would rather inform people of the opportunities they can take advantage of than fear people into inaction and miss out on opportunities.   Really the only thing that people should fear now is that if the market continues to improve prices will strengthen and rates will go up. 


Those that do ignore the advice of the naysayers will reap the rewards of this market in the yeas to come.  I do feel that the market has made it’s correction and since real estate historically doubles about every 10 years, I feel this is the beginning of the next 10 years.

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