40 minutes ago
Statistically speaking, perhaps the most underreported story on our economy, right now, concerns the “shadow inventory” nightmare that currently exists throughout the U.S. housing market. This has been further exacerbated by many years of misinformation (i.e.: ongoing overstatements of home sales figures) provided by the “ethically-challenged” National Association of Realtors (NAR).He went on to quote an article by Michael Olenick published at Naked Capitalism, and disseminated Olenick's insult of perhaps the nicest economic blogger there is:
Throughout the mainstream media, and even amongst some of the more normally-credible sources on our economy in the blogosphere* [*NDD note: this was a swipe at Bill McBride a/k/a Calculated Risk, as is clear below], we’re now hearing about how the housing market is “modestly improving.” Frankly, this is total propaganda; statistical “improvements” have been nominal, at best; since virtually all of these “reliable” sources are still, to this day, all but ignoring (both statistically and editorially) this extremely pertinent, albeit inconvenient, reality.
The normally astute Bill McBride of Calculated Risk has joined the chorus of cheerleaders to argue that an alleged decrease in housing inventory means that house prices are near their ethereal bottom.He concluded by taking one more swipe at CR:
Here's the link to the top story over at Calculated Risk, this morning... Case Shiller: House Prices fall to new post-bubble lows in December …and here's McBride's most recent piece on new home sales… New Home Sales: 2011 Still the Worst Year, "Distressing Gap" remains very wide by CalculatedRisk on 2/24/2012 12:09:00 PM (The shadow inventory issue is not mentioned in either piece.)He rivisited this prediction of ongoing Doom one more time in March:
All of those “housing-has-bottomed” memes you’re now reading about (which conveniently don’t even reference, let alone discuss or acknowledge, an unreported massive “shadow inventory” in U.S. housing that’s not covered in the common metrics used nowadays in the MSM, or even in the blogosphere), HERE’s the latest from Michael Olenick, a favorite of Yves Smith over at Naked Capitalism: “Beware of Housing Market Cheerleading.”Alas for the Pied Piper of Doom, the Case Shiller seasonally adjusted bottom of January 2012 was reported in March literally within days of his later screed. In fact, the Index is now up 3.5% from its January level, meaning that it has outpaced inflation as well. Further evidence of the bottom is that almost every other housing price index has followed a similar pattern.
To put it bluntly, an examination of the newly available aggregate US asking price data from Housing Tracker contradicts the conventional wisdom above that, as "the housing market ... ha[s] another 15% downside to go," and that "reasonable expectations for asset price stability, if not appreciation [a]ppears unlikely to happen any time soon."While the permabear Doomers will stamp their feet, the simple fact is that there is now overwhelming evidence that the housing market has bottomed exactly when I said it would. The only question now is whether it is a long term bottom, or whether it might still be undone by the long-fabled but yet to appear foreclosure tsunami.
To the contrary, housing prices have already "faced the brunt of market forces" without support for a full year, as a result of which they have been falling closer and closer to equilibrium, the rate of decline is abating, and actual real time data shows that nominal if not inflation adjusted stability may indeed be reached as soon as early next year.