VAR recently brought a post on Realtor Magazine’s blog to my attention.  The article talks about how Charlotte, NC agents are having it “hard at the top”.  They are in one of the few US markets which has been unfazed by the national housing downturn. That is, Charlotte has actually shown an increase in property values over the past year. As a result, NAR economists continue to parade Charlotte in the press, as if to say, “See? It’s not all bad!”

This is having unintended consequences. It turns out that because of the all the positive press about how Charlotte is weathering the national housing storm, agents there are dealing with multiple fall-through contracts and sellers who perceive themselves to be immune from the downturn of the rest of the country.

In Hampton Roads, we are going through something similar to Charlotte.  VAR occasionally points to Hampton Roads as one of the bright spots in the Commonwealth’s housing market. According to VAR’s most recent figures, the Hampton Roads market has seen values hold steady, and there are even pockets of increases.  We also have the luxury of living in a very transient environment.  We constantly have people moving in and out of our area (in large part due to the military) and the need for housing is always active in our market.

I suppose we are fortunate in that the media coverage of our local real estate market has leaned toward the “doom and gloom” of the nation at large.  Reasonable sellers (for the most part) understand that they have competition in this market and need to compete in order to sell.

Wise brokers tend to use the term “Real Estate is Local”.  That is DEFINITELY the case in Hampton Roads.  We have pockets where you can’t seem to GIVE a house away and others where multiple offers are still par for the course.

So, where IS our market?  Our market is back to basics.  Buyers want to see affordable and in great condition.  Buyers are looking for single family homes under $245,000 with no updating needed.  If they look at condos and townhouses… there are a lot to choose from so they choose the BEST for LESS.  Higher end?  Buyers want the least expensive home in the neighborhood and they expect it to be in average to good condition.  Buyers want a DEAL.  If a seller won’t negotiate, the buyer will work their way down the street until they find a seller who will.

Foreclosures?  We really don’t have that many.  They normally sell within 15 percent of market value so the “deals” are not here.  I recently was asked by a bank to complete a BPO for a property about eight blocks from the Virginia Beach Oceanfront.  The bank asked for only foreclosed comparables and the closest I could find was more than nine miles away.

The biggest downturns we have seen are in the outlying areas (Isle of Wight, Suffolk, NE North Carolina).  These are areas that became “hot” when is was virtually impossible to obtain a decent, affordable home in Norfolk, Chesapeake or Virginia Beach.  Since the majority of the population commutes to Virginia Beach, Norfolk, Chesapeake or Portsmouth, the outlying areas are feeling the pinch as commuters have chosen to live closer to their places of employment (with gas at $4/gallon).

So, we are counting our blessings here in Hampton Roads.  We still have buyers and we still have sellers.  Our inventory is up; however, our sales prices are pretty level.

On a side note…with the price of fuel so high, many vacationers are choosing to stay closer to home and we are seeing more and more tourists from the Commonwealth!  Maybe along those lines we can regain some of the lost second home market!

The Mission

Awhile ago fellow VARBuzz and AgentGenius contributors Jim Duncan and Daniel (The Zebra) Rothamel wrote articles regarding Paying NAR Dues and NAR Engaging it’s Members.  They are great posts, with tons of interactions from members who support and unfortunately some of those who don’t support the Association.  The entire mission of the Association is to be a relevant factor of support and advocacy for the REALTOR member.  A great deal of work goes into carrying out the directives to fulfill these missions, from both REALTORS and staff.  Having now been both a practicing Realtor and most recently a staff member, I am seeing that a vast number of the tools, initiatives and resources created to enhance the agent’s success have been underutilized.   I feel that the Associations are answering your call, but you can’t hear us.

What Is The Barrier

As a staff member of FAAR, I’ve received countless calls and e-mails asking for a wide variety of assistance, and I always have resources from our local association, VAR or NAR to give to the member.  The members frequently ask why they didn’t know about these tools in the first place - good question.

Recently our Association had a meeting planned for Brokers, so that they could come provide open-forum feedback in preparation for our Strat Planning session.  Four days before the meeting and after a ton of notices, e-mails and marketing we had two members registered.  The workgroup decided to call the Brokers and in response we had almost 50 people attend the meeting.

What Works?

While pondering this post, I asked my friends on Twitter how they would like to be communicated with.  Almost all of them said e-mail.  However, one commented  that e-mails have become so ubiquitous that they are almost irrelevant.  There are so many people trying to e-mail you and get your attention that people are scanning them over without registering their importance.

This would explain why only about 20% of our e-mails, sent to members, are actually read.  But it begs the question; why with so many agents asking for their Associations to provide services, are members not paying more attention to the primary resource for their business? 

Call To Action

Most all Associations use e-mail, post cards, brochures, fliers, etc…  Calling on the phone, for most Associations, isn’t an option because of the size of the organizations and lack of staff.  So, what do you feel is the best way for your Association to keep you up to date and show you the plethora of tools that we’ve developed to help you with your business?

Ken Harney in today’s Washington Post:

Could designations of Zip codes, metropolitan areas and entire states as “declining markets” hinder a real estate recovery and hurt minority groups and moderate-income buyers disproportionately? Growing ranks of critics say yes.

Since late 2007, most lenders, insurers and mortgage investment firms have compiled lists of markets that they regard as higher risks because housing values are dropping. In those areas, borrowers are charged higher rates and loan fees and are required to make bigger down payments — costs that can rise significantly when applicants have credit scores below designated minimum levels.

In some cases, the extra fees can add more than two percentage points to the interest rate and require much more cash up front. At their extreme, declining-market designations remove entire categories of real estate from financing eligibility. Some private mortgage insurers, for instance, won’t touch second homes or rental-home investments anywhere in large swaths of Florida and California.

Industry estimates on affected Zip codes range from 8,000 to more than 12,000 across the country. Many parts of the Washington area are included.

Full story here.

This post is part of a series covering my journey of discovery through the history of the National Association of REALTORS. As my guide and my inspiration, I am using a book published by NAR, “100 Years in Celebration of The American Dream,” celebrating the Centennial of NAR. The following was inspired by reading just the first ten pages.

The National Association of REALTORS turns 100 years old this year. That is pretty old, as organizations go. It is old enough that there is not one single member of our organization alive today that can remember the birth of NAR. This is both good and bad.

The Good

100 years is a long time. Here is some simple math:

1908 to 2008 = 100 years

1776 to 2008 = 232 years

NAR has been around for ALMOST HALF OF AMERICAN HISTORY!

The people who make up the membership of NAR have lived and worked through many of the significant events in American history.

The fact that our organization is 100 years old is a testament to the vision and hard work of the men who met together in Chicago 100 years ago with the idea of starting a national organization of “real estate men,” as they were then called. As a general rule, bad ideas don’t usually stick around for 100 years (I can think of a few exceptions, but most of them required a war or two for survival). Those men, and all those who have come and gone since, obviously did something right.

The Bad

100 years is a long time. Our culture has changed quite a lot over that time. Attention spans are much shorter, and so are memories. This means that much of what has been learned might have already have been forgotten. This fact is what makes the NAR Centennial book such an important publication. We should always be reminded of those who came before, we should always be willing to learn from their example and from their work. If we fail to do that, then the end result is that all of their hard work will have been in vain. I hope very sincerely that those of us who have chosen to bear the title of REALTOR today, will do our best to honor those without whom our privileges would not be possible.

Let’s Begin at the Beginning

I dare think that the practice of real estate at the turn of the 20th century would be almost completely foreign to REALTORS practicing today. When I say this, I’m not talking about the many technologies that make our daily work life more efficient. I’m talking about the actual cultural, professional, historical, and legal climate that was present 100 years ago for real estate men.

Some things to consider about the world of real estate 100 years ago:

1) Widespread private real estate ownership is brand new. I think it is pretty safe to say that the majority of you reading this post own the home in which you currently live. There is also a pretty good chance that you live in a suburb, or even a rural area (like me). 100 years ago, that was not the case. Most Americans did not own their homes, and the cities held the vast majority of the American population. The concept of the suburb hadn’t even been born yet. It was about this time, however, that many cities and towns were rapidly expanding. This meant that those expanding cities and towns needed a place for people to live, they needed real estate.

2) There were no licensees. 100 years ago, anyone, I mean ANYONE could call themselves a real estate dealer. There were people called “curbstoners.” These unscrupulous individuals would basically set up shop as a real estate dealer on the sidewalk (the curbstone), and bilk or swindle anyone they could. Have you ever been in a city and been approached by people handing out flyers for something, or saying, “psst– come check out these watches and handbags I have. . .” now imagine if those people were peddling real estate. Scary, but it was happening all over.

3) There were no rules or laws governing transactions. We live in a world with RESPA. 100 years ago, however, Real estate transactions were governed by simple contracts common law. All that was needed was an agreement between the buyer and the seller. No mountains of paperwork, no lengthy disclosures, no warrantees, and very little recourse if they whole thing went awry.

These Conditions Warranted A Solution

The ethical practitioners of real estate recognized there were problems. What they didn’t have was a viable way of solving them. They did recognize, however, that the problems were similar all over the country. As the number of real estate practitioners grew, so to did the need for cooperation and collaboration among them if they were to address the issues facing their profession.

It took the leadership and vision of some of the nation’s largest real estate boards at that time to address these issues and launch the organization that would eventually be known as the National Association of REALTORS. We all know, however, what can happen to the best laid plans of mice and men if there is no leadership to guide them.

The necessary leadership would come first from the man who would eventually be the 5th President of NAR. More on him, and the seed that he planted, in my next installment. . .

It’s not even the “Gateway” anymore. What it is NOT is an MLS. It is not intended to be an MLS and is not designed to be an MLS. It is intended to be the one and only source of real estate information for Realtors to better do what they do.

Don’t be misled by the title “The Real Estate Channel” - it is a fill-in for what is a yet-to-be-determined name for what used to be the “Gateway.” Virginia was well-represented by Bob Blount and Tom Innes on the Presidential Advisory Group* that deliberated over and ultimately delivered the following report linked here (PDF).

Rather than explain what it “is” read the Questions and Answers document - I have omitted some of the questions to focus on those below that highlight the basics, MLS’ and cooperation and compensation. If you have further questions, please ask.

—————

“Q. 1 My MLS meets my needs. I don’t need information about property outside my market area. Why should I support TREC?

A. Comprehensive real estate information currently exists but that information is not always analyzed, categorized, or readily available in an easy-to-use, trusted format focused on the needs of REALTORS®. Consumer-focused real estate websites are gathering more and more information and REALTORS® will come increasingly to rely on those websites. Without convenient, immediate access to information to analyze/interpret for their clients and customers, REALTORS® will no longer be at the center of real estate transactions. TREC will also enable REALTORS® and MLS participants to access essential information about properties in their market area which may be “just outside” the area served by their MLS, and TREC information will be richer and deeper than what is available in MLS compilations.

Q. 3 How will TREC help me make money?

A. Time is money. TREC will ensure that REALTORS® and MLS participants have immediate access to the information they need to serve clients and customers in a “member-focused” format. Much of the information that TREC will deliver will not be otherwise available conveniently or economically.

Q. 4 How does TREC differ from Realtor.com?

A. TREC is not advertising and will not be publicly accessible; TREC will be revenue neutral and will not sell ads to its users.

Q. 6 What about cooperation and compensation?
A. Accessing TREC will not involve offers of cooperation or compensation. Cooperation is a Code of Ethics issue. All REALTORS® cooperate with other licensees except in those rare instances where cooperation is not in a client’s best interests. Cooperative compensation is an MLS issue. TREC is neither an MLS or an association of REALTORS®.

Q. 8 How will TREC impact current MLS vendors?
A. Data standardization may create a more competitive market for MLS.

Q. 10 Is TREC a national MLS?
A. No.

Q. 12 Will the public have access to property data through TREC?
A. No.

Q. 13 Can a property owner opt-out of having their property included in the TREC database?
A. No. TREC is not an MLS and is not an advertising vehicle. Information from the TREC database will not be publicly available on the Internet as are listings on MLS “public sites” or the Internet sites of third-party aggregators (e.g. realtor.com).

Q. 16 What control will individual MLSs have over the rules if they participate in TREC?
A. MLSs will retain complete control over their own rules and regulations, including the authority and responsibility of enforcing those rules.

Q. 18 Who is the “real estate community” that will be involved in TREC? Are they Zillow, Trulia, Google et al.?
A. No. The “real estate community” is MLSs and local and state associations of REALTORS.

Q. 20 How will the integrity of data in TREC be ensured?
A. TREC will rely on – and its success will depend on – quality data being provided
by MLSs and other information sources. Stringent technology safeguards will be
implemented to foreclose the possibility of unauthorized access.

Q. 23 How will duplication of property listings be avoided on TREC?

A. Every parcel of real property will be included on TREC – irrespective of whether it is currently available for sale or lease. Those available for sale or lease will be identified (“flagged”) accordingly.

Q. 24 How will NAR benefit?
A. TREC represents an opportunity for NAR to better serve its members and to facilitate a more efficient real estate marketplace. TREC will keep REALTORS® at the center of real estate transactions. TREC is revenue neutral and costs will be no more than what is necessary to develop and operate TREC. It will not be a revenue source for local associations, state associations or the National Association.
Copyright NATIONAL ASSOCIATION OF REALTORS®”

—————-

Know this - where we started with this project and where we are today is very, very different.
To get to where we are today, read some of the background on how we got where we are today.

FBS blog
RealCentralVA
BHB
Agentgenius

*The author of this post, Jim Duncan, was also a member of the PAG.

Technorati Tags: NAR, real-estate, realtor

Following is just-in from NAR’s Joe Ventrone (Vice President of Regulatory and Industry Relations):

Over the past few months, the GSEs (Fannie Mae and Freddie Mac) along with the Private Mortgage Insurance Industry (MIs) have been increasing fees and tightening up underwriting standards. This is a direct result of the mortgage crisis which surfaced last August. NAR is communicating with the GSEs about these changes and raising concerns about their impact on the market and unintended consequences. For example, the declining market policies may be stigmatizing entire markets and unfairly denying homeownership to homebuyers, especially minority and low income homebuyers. Although the recent GSE actions will have a significant impact on the mortgage and housing markets, we recognize they have suffered serious financial losses in recent quarters and their goal, like ours, is to make sure they are strong enough to continue making the secondary market work. Without the GSEs, the current crisis would have been much worse.

The following factors may help explain recent GSE decisions:
• These are essentially private entities that are universally losing billions because the mortgage markets in the last several years failed to apply strong underwriting standards.
• After what has happened in the mortgage market, with hundreds of billions of losses, a period of retrenchment is inevitable. A return to zero down mortgages is unlikely, which is not necessarily a bad thing.
• The FHA mortgage insurance program is a sound alternative for subprime and many Alt-A borrowers, People with weaker credit and a small downpayment should consider using FHA. There is a long history of FHA filling that role, and we expect the pending FHA reform legislation to help revitalize its programs and make them even more accessible.
• If Fannie and Freddie are charging too much and setting their standards unnecessarily high, considering the risk, there will be an opening for others to compete. Unfortunately, considering how cautious banks and other mortgage lenders have become, this could take considerable time.
Attached please find an update from our Real Estate Services program which was drafted by NAR consultants. This update provides up to date information on the current state of the mortgage market.

These are very trying times for our mortgage finance system, our members, and the American homebuying consumer. We at NAR are keeping abreast of up to the minute changes from the mortgage lending industry as well as the GSE’s and the financial regulatory agencies. In this regard, we continue to work with the GSEs on their declining markets policy. Please visit www.Realtor.org for current information. Please do not hesitate to call any of the following NAR staff if you have any questions.

NAR Contacts

FHA Programs Regulatory Contact:
Jerome Nagy, jnagy@realtors.org <mailto:jnagy@realtors.org> , 202.383.1233

FHA Programs Legislative Contact:
Megan Booth, mbooth@realtors.org <mailto:mbooth@realtors.org> , 202.383.1222

GSE Programs Regulatory Contact:
Jeff Lischer, jlischer@realtors.org <mailto:jlischer@realtors.org> , 202.383.1117

GSE Programs Legislative Contact:
Marcia Salkin, msalkin@realtors.org 202.383.1092

This, from NAR:

On February 13, 2008, the President signed the stimulus bill, H.R. 5140.  This is the first in a series of memorandums discussing the implementation of the two mortgage related provisions included in the signed measure.  The bill provides temporary increases to both the Federal Housing Administration (FHA) and government sponsored enterprises (GSE) mortgage limits until December 31, 2008.  NAR will provide updated information on these provisions as it becomes available.

The new law makes seven temporary changes to the FHA and GSE loan limits: 
> Raises the base FHA loan limit (“floor”) to $271,050 (65 percent of the current GSE limit of $417,000),
> Sets the base GSE loan limit (“floor”) at $417,000.
> Raises the maximum FHA loan limit from $362,750 to $729,750 (175 percent of the Fannie/Freddie (GSE) floor of $417,000)
> For all areas where the FHA limit exceeds $417,000, the GSE limit will be the same as the FHA limit.  So, for example, if the FHA limit is $590,000, the GSE limit will also be $590,000.
> Increases the factor used to calculate FHA limits from 95 percent to 125 percent of area median sales price.  Any area with an area median sales price above $216,840 will benefit from this change.
> Replaces the existing FHA ratios used to calculate maximum loan amounts for two-, three- and four-family units financed by FHA with the ratio used by Fannie Mae/Freddie Mac ratios to calculate their limits for two-, three- and four family unit properties.

Fannie Mae and Freddie Mac two-, three- and four family unit loan limits increase the same percentage that the single family limit increases.  In 2006, for example, the GSE single family limit increased 15.95 percent and the mortgage limits for multiple units increased 15.95 percent.  This change should result in significant increases in FHA limits for multi-unit properties.  The Secretary of the US Department of Housing and Urban Development (HUD) will now have the discretion to raise the maximum FHA loan limit by an additional $100,000 for all properties (including 2-4 family units).

Implementation
HUD is required by the law to publish the new mortgage limits by March 14, 2008.  These new limits will be effective for FHA immediately upon publication.  NAR developed estimates of the temporary FHA and GSE single-family loan limits.  This data can be found here.

The NAR sent a letter to HUD on February 13, 2008, urging HUD to implement the limits as quickly as possible.

The implementation schedule is complicated by the fact that Fannie Mae and Freddie Mac will be using the same limits above $417,000 and Office of Federal Housing Enterprise Oversight (OFHEO) Director James B. Lockhart, III (Fannie and Freddie’s regulator) noted in a recent speech that implementation could take up to three months with an additional month for partial enactment.  Mr. Lockhart offered no explanation as to what partial enactment means.  NAR sent a letter to OFHEO on February 13, 2008, urging immediate adoption of the new loan limits.

To date, Fannie Mae and Freddie Mac have not indicated their implementation plans once limits are established by OFHEO.

Eligible loans
> FHA – The statute applies to “mortgages for which the mortgagee has issued credit approval for the borrower on or before December 31, 2008”.  We believe this means any loan which receives underwriting approval before January 1, 2009.

> GSE – The statute applies to “mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008”.  We believe this means any loan originated before January 1, 2009.  This also means that GSE can buy loans that meet the new loan limits that were originated after June 30, 2007.  Consumers with existing jumbo mortgages may want to consider refinancing under the new loan limits prior to January 1, 2009.

What if I don’t think my loan limit accurately reflects the median home price?
FHA has a process by which the local area median loan limits may be challenged.  If you do not believe the published loan limit accurately reflects 125 percent of your median home price, you may provide HUD with comparable home sales data to make the case that the loan limit should be raised.  NAR is currently creating a guide for REALTORS on how to challenge your loan limit and it will be available shortly.

The opinions expressed below are from consultant Brian Chappelle, Partner, Potomac Partners 2127 S. Street N.W. Washington D.C.  20008.   These are the consultant’s opinions and do not necessarily reflect the views of NAR.

While every client must make their own decision on this topic, below is an assessment of the risks.

Areas at the new base loan limit (“floor”) of 65 percent of the current GSE limit ($417,000) = $271,050

Since this amount is established in the bill and the law requires that HUD implement the provision in 30 days, there appears to be minimal risk in taking applications at the higher base loan limit (“floor”) immediately.

If you wanted to close a loan at the higher base limit prior to HUD’s implementation of the statute, the primary risks are two-fold.  1) You would have to run the loan through the Total Scorecard again to remove the “Ineligible” message because of an excessive mortgage amount for the area.  If the borrower’s credit quality deteriorated in the interim, there could be an eligibility issue.  You could underwrite the loan manually to avoid this issue and 2) the insurance endorsement process.  A loan must be submitted within 60 days of closing.  Otherwise, the lender is required to certify that the most recent payment was made in the current month (See Mortgagee Letter 2005-23 for FHA late endorsement requirements)

High cost areas (Above $271,050)

The mortgage limit is determined by calculating 125 percent of the area median sales price which is determined at the county or metropolitan statistical area (MSA) level.  We believe that HUD is likely to use the same methodology and data that were utilized for calculating the 2008 mortgage limits.  However, although it has been less than 30 days since HUD published those limits, it is also possible that HUD could update its data.

Risk is Divided into Two Categories:
> First, for areas with mortgage amounts below the current Fannie/Freddie mortgage limit ($417,000), we see less risk since HUD will be able to make its decision independently and implement these limits reasonably soon (i.e. less than the month) and will probably not implement any special underwriting requirements.  The main issue is, of course, the calculation process for the maximum mortgage amount.  In this regard, maximum loan amounts are increasing in many high cost areas because of the 125 percent of area median calculation (instead of 95 percent that was previously used).  The issue is really how much.

> Second, for areas that will have maximum mortgage limits above the current Fannie/Freddie maximum limit, it is more complicated because of the impact on Fannie Mae and Freddie Mac, the role of their regulator (OFHEO) and possible special pricing and underwriting requirements for these loans in addition to the calculation issue discussed above.

We believe there is much more uncertainty about the speed with which the new provisions will be implemented for loans above $417,000 particularly for conforming loans.  However, pricing and underwriting issues would also apply for FHA loans.  For example, since these loans will be available for a short period of time (until December 31, 2008), it is possible that Ginnie Mae would form special customized pools that could affect pricing.

NAR Contacts
> FHA Programs Regulatory Contact:
Jerome Nagy, jnagy@realtors.org, 202.383.1233

> FHA Programs Legislative Contact:
Megan Booth, mbooth@realtors.org, 202.383.1222

> GSE Programs Regulatory Contact:
Jeff Lischer, jlischer@realtors.org, 202.383.1117

> GSE Programs Legislative Contact:
Lynn King, lking@realtors.org, 202.383.1156

– Scott Brunner, CAE

Admittedly, our National Association has been taken a beating of late for its adjusting and re-adjusting (and re-re-adjusting) of its 2007 homes sales forecasts. That, along with the seeming “It’s Always Sunny in Real Estate” spin that many critics read into the latest iteration of its public awareness initiative, have gotten us to the point that many in the press and the RE.net are questioning NAR’s credibility, both as a distiller of housing industry economic data and a truth teller when it comes to what’s really in consumers’ best interests in today’s real estate markets.

While NAR (or VAR either, for that matter) is not above criticism, there are always (at least) two sides to every story. There are even multiple facets to the same story. And there are certainly multiple ways of collecting and analyzing data, and multiple, sometimes contradictory, conclusions that can be drawn from that analysis. I’ll not belabor the point, except to say this: In particular, I believe that NAR’s Chief Economist Lawrence Yun has gotten a bad rap for what some see as his too-rosy forecasts and well-spun public comments about the health of the real estate economy.

Thankfully, he now has a new platform for explaining himself and the inner workings of NAR’s econometrics, and it’s worth a read. It’s not a blog (yet), but NAR has begun to post commentaries by Yun at realtor.org behind the “research” tab. In particular, his recent post on some of the reasons for divergent home price trends is a spin-free, must-read.

I’m glad Lawrence is finding his voice. He’s a fresh, thoughtful, truth-telling asset to NAR. Would that more in the media (and, yes, the real estate blogosphere) were as thoughtful.

Now if they’d just turn his commentaries into a blog, we could all comment….

(I’m told Lawrence’s commentaries will be posted with some frequency at http://www.realtor.org/research, in case you want to bookmark it.)

Three reasonable facts . . .

1. These days (and perhaps always) consumer confidence plays a large role in the state of the housing market. Many buyers and sellers are fearful that home values are dropping precipitously, or will be soon.
2. Consumer confidence, in many ways, is shaped by the mainstream media — as this is where many Americas get information about the housing market.
3. One of the highly regarded sources of information on the housing market is the Case-Shiller Index, which tracks 20 major markets.

. . . that may be having unreasonable effects . . .

• The markets featured by the Case-Shiller index tend to be in California, Florida and other down markets. This makes the index show price declines, which the media highlight, which scares consumers. As Lawrence Yun states, “This is total distortion of market conditions based on a small selection of falling local metro coverage.”
• A second source of information on the housing market, the Office of Federal Housing Enterprise Oversight (OFHEO), shows 70% of 287 local markets having price increases. Again from Yun, “the OFHEO survey gets far less coverage than the Case-Shiller index. Perhaps the media is intent on looking for sensationalized headlines. After all, the media is in the business of selling news, and more sales can be made with sensationalism. (I have been told by few reporters off-the-record that they are interested in increasing their viewership even if it means putting things out of context.) “
• And perhaps the most unreasonable of all, “Another factor that rarely gets attention is that Dr. Shiller, a Yale professor, has a side business in Chicago. His index is used at the Chicago Mercantile Exchange for hedging housing futures values. The more hedging of bets that occur, the more profits go into Dr. Shiller’s bank account. And more hedging of the bets will take place if people believe there will be a crash in housing values. So naturally he has a financial incentive to “scare” the market.”

The entire article from Lawrence Yun is definitely worth reading — and it is great to see NAR bringing these facts to light.

H/T - Jim Duncan, RealCentralVA.com