Bubble Babble: Who's got it
right?
Part 1: Making
sense of a changing housing market
Tuesday,
July 06, 2004
Inman News
 Editor's
note: The housing bubble debate has grown louder in recent weeks. Rather
than add to the mix of confusing stories that attempt to decide who's
right and who's wrong, this four-part series takes a closer at look at the
numbers, what's happening in specific markets and how the media is
relaying the message.
In the early
1990s during a real estate downturn, I was turning out newspaper column
after newspaper column about the consequences of a depressed housing
market in Southern California
One day, I
received a note from a reader with a line I will never forget: "The worst
thing about this market is Bradley Inman."
In the mind of
this real estate agent, I was to blame for the downturn in the real estate
cycle. I only wish I had such power. Or maybe she just did not want to
read about what she was experiencing. I can understand
that.
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of a changing real estate market prompted our writers and editors at
Inman News to investigate
how we might think about this differently. It is not another housing
bubble analysis story; we've already done that (several times in fact).
And lately the New York
Times, CNN and
Wall St. Journal and
several good magazines and books have tried their hand at deciphering the
question of whether there is a real estate
bubble.
Tell us your
opinion on the housing bubble
debate.
Instead, we
decided to look at three important parts of the debate in a series titled,
"Bubble babble: Who's got it right?"
On Wednesday,
"Part 2: No agreement on analyzing the real estate market," will attempt
to reconcile two sets of numbers: bullish industry forecasts and the dire
crash predictions by credible institutions like UCLA. Never has there been
so much confusion over the future of the housing market. How can consumers
and real estate professionals make sense of these clashing
forecasts?
On Thursday,
"Part 3: Pockets of real estate market are cooling," will go under the
covers in several local communities and try to spot any hint or suggestion
that markets may actually be turning. Some local housing markets are
cooling, while others are booming. We tried to find out if some markets
have a mess on their hands.
And on Friday in
"Part 4: Media caught in real estate bubble fray," we'll talk to the media
and see if they have any accountability in this trend. Are they ignoring
the facts in what could turn into the biggest bust since the stock market
crash of the late 1990s? Or, are they guilty of looking for trouble where
there is none?
But let's start
with some sobering facts. Housing markets do turn bad and this one has
been hopping for a very, very long time.
Nationwide
existing-home sales
|
Year |
Sales
(in millions) |
|
1969 |
1.59 |
|
1978 |
3.98 |
|
1982 |
1.99 |
|
2004 |
6.80 |
Median home
price
|
Year |
Price |
|
1969 |
$21,800 |
|
1978 |
$48,700 |
|
1982 |
$67,800 |
|
2004 |
$183,600 |
Source:
National Association of Realtors |