So What if We Had Just Listened To Mark Hanson (Mr. Mortgage)

It seems as if the news cycle is running about a year behind on just how deep and wide the credit crisis is. When the final story is written (if any of us survive to write it) we will take a look back at the folks that got it all dead wrong and run after them in angry crowd format with sticks and torches. So be it. But we will also eventually identify the people that had it dead right from the get go. One man that identified and warned about the sub-prime crisis early on in plain language was Mark Hanson, or "Mr. Mortgage" as he is oft referred to within inner circles.

Mark Hanson's discussions are so valuable for West Coast Real Estate that we felt it necessary to track him here at The Plastico full time with an RSS Feed on the right side of the page. You can stay literate on the housing market just by following his articles.

If you are a buyer or seller of real estate in California you need to hold your nose and read Mark's latest article where he takes a moment to rip the CA. Association of Realtors a new a**hole.

CA Association of Realtors Needs a Math Class…Perhaps Ethics as Well

Posted on September 29th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

In their latest attempt to paint a picture of the glass totally full of Cristal Champagne, CAR released a August home sales report on Thursday that made it seem as though the state had no housing-related issues whatsoever. This is exactly why I always scream ‘YOU CAN’T BELIEVE THE HEADLINES!

“Sales are now 85 percent above the monthly trough for this cycle, which occurred in October 2007, and for the first time this year are ahead of 2007 in year-to-date terms,” said C.A.R. President William E. Brown”.

I think CAR either needs a math class or should not be allowed to ever put out another press release. I have no idea what they are even saying here…

“The statewide sales figure represents what the total number of homes sold during 2008 would be if sales maintained the August pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales”

“Closed escrow sales of existing, single-family detached homes in California totaled 490,850 in August at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 56.7 percent from the revised 313,310 sales pace recorded in August 2007. Sales in August 2008 increased 1.8 percent compared with the previous month.”

This would not bother me so much if three days before I didn’t put out a very well-researched August CA Home Sales Report saying:

“August was not good for the CA real estate market. Just one month after pom-pom’s were flying over how well the market did in July and bottoms were again being called across the board yet again, August, a peak sales month, delivered another blow. Total sales were off, organic sales were off, foreclosure-related sales rose, defaults rose and prices tumbled.”

The facts are that in August 2008 37,988 new and resale properties sold according to DataQuick. Last August, there were 33,429. There was an increase but nowhere near the 85% quoted above or the 56.7% quoted below. The sad part is in August 2005, 73,285 homes sold. Yes, there was an increase year over year from August 2007 to 2008, which could be viewed as encouraging. However, the number of ‘organic’ sales in August 2008 were only 21,172, as foreclosure-related sales made up 46.9% of the total sales. In August 2007, foreclosure-related sales were negligible. Therefore, in my book real home sales fell sharply from August 2007 to August 2008, less inventory was absorbed, prices tumbled, which is the most destructive and the foreclosure market remains the real estate market at least for now. Nice try guys.