Matrix Blog

Posts Tagged ‘CNBC’

[In The Media] CNBC On The Money Clip for 8-13-07

August 13, 2007 | 11:56 pm | Public |

CNBC gave me a call this afternoon for this 7:30pm live appearance. Ilaina Jonas of Reuters wrote a story that got picked up by publications like the Washington Post and Eliot Brown of the New York Sun wrote a similar story about slipping high end market confidence. I thought Melissa Francis did a nice job with the interview.

To play the clip (better edited version coming).

This program was inspired by two highly successful Manhattan real estate brokers who indicated they have noticed a lower sense of urgency by purchasers of high end properties in recent weeks.

Thoughts:
* Its the middle of August.
* Three weeks of constant hammering about the mortgage markets would cause any market to pause and reflect.
* I suspect bonuses won’t be significantly affected until 2009, but thats not to say 2008 bonuses couldn’t be tempered, but they are still expected to be higher than last year.
* The dollar remains week and inventory continues to fall.
* Its the middle of August.
* If the mortgage market has impacted buyer confidence and its only been a few weeks, its kind of tough to make a universal assumption that the market is significantly different because buyers are taking longer – thats 3 weeks by definition.
* If any of the 3 main factors causing unprecedented demand: bonuses, weak dollar and solid economy/reasonable mortgage rates, change significantly, the market has the potential to show weakness
* Prices aren’t spiraling out of control in Manhattan like we saw in 2004. There is elevated demand offset by a high level of new development entering the market, keeping prices in check, except for the very high end of the market (They’re rising).
* Speaking from my own experience (with deliberate intent to spread willful anecdotes but without malice), my own appraisal company set a record for sales in our first half of August.
* Oh yeah, its the middle of August so lets take some time off to reflect.

From the who says real estate isn’t porn department: Melissa’s other interview today in addition to my friend Owen Thomas at Valleywag who was on the segment before me.


Tags: ,


[In The Media] MSNBC 8-6-07 clip

August 6, 2007 | 9:08 pm | Public |

Well, I got a call on Sunday evening from MSNBC to comment on the housing market today. There’s been significant focus on housing lately (actually for the past 5 years) given the upheaval in the mortgage arena.

I have done a bunch of CNBC spots but this was my first on MSNBC – a lot of fun (although they spelled my company name incorrectly).

To play the clip.

The premise: Is this a good time to buy? is a loaded question. Whether or not someone should buy depends on affordability, purpose (such as for investment or owner occupancy), as well as the length of holding period, among a slew of other reasons.

However, its a questions many people want an answer to.


Tags: ,


Givin’ Speeches About Mortgages And Housing: No Answers, Only Solutions

July 21, 2007 | 6:13 pm | |

On the same day last week, Wednesday to be precise, presentations touching on the housing market were given by two influential financial leaders: Fed Chairman Ben Bernanke and James B. Lockhart III, Director of OFHEO, which oversees Fannie Mae and Freddie Mac (GSE’s). Both are accomplished individuals whose jobs influence the housing market to a certain degree. I am not sure which one I would have liked to have heard in person so could only hope for a double header.

Fed Chairman Ben Bernanke (Its been a year and a half, so I feel like I can refer to the Fed Chair as Ben) spoke in front of Congress, before the Committee on Financial Services, U.S. House of Representatives. He is required by law to do this twice per year and I kind of feel sorry for him. I listened to his live testimony on CNBC and was struck by how smart he is and how weak most of the questions posed to him were. After 2 minutes of thank-you’s from each member of the committee, they asked him to explain things like core inflation and how he was going to protect subprime borrowers in the future. The media coverage of the testimony was extensive and rather than spending much of the time talking about the economy, the bulk of the questions from Congress was spent on protection of borrowers, the problems with hedge funds, lax underwriting and why didn’t the Fed see this coming. Bernanke’s macro perspective seemed a little out of sync with the questions posed. I was struck by his references to the housing market, which suggest more weakness to come:

The pace of home sales seems likely to remain sluggish for a time, partly as a result of some tightening in lending standards and the recent increase in mortgage interest rates. Sales should ultimately be supported by growth in income and employment as well as by mortgage rates that–despite the recent increase–remain fairly low relative to historical norms. However, even if demand stabilizes as we expect, the pace of construction will probably fall somewhat further as builders work down stocks of unsold new homes. Thus, declines in residential construction will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth shoul

…and subprime, which was more dire:

For the most part, financial markets have remained supportive of economic growth. However, conditions in the subprime mortgage sector have deteriorated significantly, reflecting mounting delinquency rates on adjustable-rate loans. In recent weeks, we have also seen increased concerns among investors about credit risk on some other types of financial instruments.

James B. Lockhart III, Director of OFHEO (Its been a year since he took over OFHEO and my rule of thumb for someone with roman numerals after their name is to avoid nicknames so I’ll refer to him as James) gave a year in review speech in Washington DC. He referred to unexpected challenges: housing and subprime. In other words, it was a surprise that the housing market is currently experiencing problems. How could an agency that deals with two large mortgage bemoths be in the dark about the housing market? However, he makes the observation that the GSE’s should be “fulfilling their mission of stabilizing the housing markets.” He refers to the “triple-witching” of the subprime market because of the tripling of subprime originations, the shift to non fully amortizing mortgages and the drop in lending standards. His emphasis was on subprime lending and how the GSE’s can help:

Despite the many problems in the subprime mortgage market it has made a positive contribution toward getting low-income individuals into their first homes. (#12)
Hopefully, the changes I have been talking about today will be continued to help place people into affordable housing without putting them and their neighborhoods into high- risk situations.

It is my belief that Fannie Mae and Freddie Mac can do even more to help in what is one of their key mission areas – affordable housing. It is also my belief that to do so they must be fully remediated with strong systems to address the credit issues in this sector and that they need a strong regulator to help ensure that they are healthy, well-managed companies.

To recap both speeches

We have both banking and mortgage oversight institutions caught unaware of the growing problems with subprime, we have a government agency responsible with the oversight of government sponsored enterprises (GSE’s) saying that it should be dissolved and a new oversight agency formed that would be more effective and we had lending standards drop sharply without reaction from regulators.

So I think I am impressed with everyone’s intentions of fixing things, but don’t we need to understand what went wrong? How can we fix it if we didn’t see it coming? I think Congress was really asking questions of Ben that it could have been answered by James. The whole thing is backwards.


Tags: , , , ,


[List-o-links] 5-14-07 Subprime Cuts: Boiler Room, Bailout, Toll, FICO & IPO

May 15, 2007 | 9:18 am | Radio |

With a bunch of USDA acronyms like FICO and IPO, 4-letter builder names and Boiler Room sales pitches, this cow has chewed more CUD than it can swallow.


Tags: , , ,


David Lereah Resigns, Spin Takes A Smoke

May 1, 2007 | 3:30 pm |

Its been a quite a 7-year ride for the National Association of Realtors and their Chief Economist David Lereah. That era is now over and he is resigning to take another position. I wish him well and I hope he reconsiders his modus operandi.

The US housing market went through the largest property boom in history and is now weakening. He did what he thought he was supposed to do: promote his trade organization through market statistics and commentary. Unfortunately, his style did not translate well when market conditions weakened. He became a cheerleader rather than an insight provider.
I met him in the green room before a CNBC appearance and he seemed like a nice guy, but almost apologetic to the optimism he was pitching. He didn’t seem to buy into the message either.

I saw the movie “Thank you for smoking” the other day and actually pictured Lereah in the staring role. See the movie and you’ll understand what I mean.

The blogosphere had a field day with the softballs that were served up on a regular basis (ie David Lereah Watch). Yet the spin never abated.

One thing I never got over through all this was the loss of opportunity for the NAR to gain credibility with consumers. Instead of spinning so blatently, NAR could have taken the torch and become the market leaders for real estate expertise. The old school of thought that if you say it often enough and loud enough, people start to believe prevailed.

The excess spin that was generated seemed to be fully embraced by a large portion of the NAR membership but really served to further distance the trade group from the public. The blogosphere provided a challenge to the old rules of publicity that the organization was not able to adapt to.

I hope the incoming chief economist has learned from this experience and will make changes in the way information is disseminated to the public. Hopefully its less self-serving.

NAR has a treasure trove a great information.

Tags: , , , ,


[In The Media] CNBC Power Lunch Clip for 4-24-07

April 25, 2007 | 12:01 am | Public |

This was a split screen discussion on luxury foreclosures. Note my two titles in the video.

A few thoughts about auction properties:

  • The discount achieved is usually based on an unrealistic list price, suggesting a wildly large discount.
  • When a listing is sold through an auction, the discount, if any, is the result of a short marketing period. In other words, the property is exposed to a specific buyer for a very short period of time. The advantage to an auction sale is that sellers to whom “time is of the essence” get a reprieve and unload the property sooner. Its not a discount for the sake of a discount. They are essentially paying for a shorter marketing time.


Tags: ,


Lereah: Pickin’ On The Underdog By Using His Mom

March 6, 2007 | 10:49 am |

Recently, Fortune Magazine interviewed David Lereah, one of the more polarizing figures associated with the housing market. He is responsible for the slew of market stats that hit the media every month and but what he is most criticized for is his interpretation of those stats. In fact, I met him personally in the green room of CNBC before a television spot and while he seems like a nice enough guy, I observed that he seems to say the same things in person that he does for reporters.

In many ways, his interpretations spurred the real estate blogosphere on for the shallowness of analysis and self-serving delivery of information. On one hand he represents a trade group and the consumer should understand this. On the other hand, he missed a golden opportunity to build goodwill between the consumer and the NAR.

In his recent interview, he attacks David Jackson of David Lereah Watch and Bubble Meter, one of the leading housing bubble blogs. The David Lereah Watch blog is a home spun effort (note typo in the title) by someone who got tired of the misinformation. I like both of these blogs.

Lereah even used his own mother for special effect:

The worst was that my mother read one of those things, and she almost started crying. And I had to say, Mom, you have to have thick skin. I’m going to be in the public and make statements about real estate, and if someone doesn’t like what I’m saying, they have every right to say something opposing me.

Lereah claims the David Lereah Watch blog refers to Lereah as Satan. Lereah calls Jackson a 26-year old that could not afford a townhouse. However, Jackson was proud of the fact that he doesn’t get personal and denies calling Lereah Satan.

However, Lereah doesn’t seem to use great ethical judgement in his market interpretation commentary so I am not sure what Jackson expected to begin with. His blog had to be noted by Lereah sooner or later.

The fact that Lereah even brought up Jackson’s blog up in the interview to try to get sympathy for the beating he has taken by the blogosphere, tells a powerful message about the ability of the consumer to tell their side of the housing story through blogs.


Tags: , , , ,


Condo Data Used To Forecast The Entire Housing Market Analyze Condos

January 26, 2007 | 1:34 pm |

Yesterday I found myself on CNBC Morning Call debating with Adam Koval, former stock analyst and founder of the San Francisco real estate site Socketsite whether analyzing the condo market as representative of the overall housing market was a better indicator. There was no real time to make our points because Natural Gas Inventories numbers were being released.

Adam is a sharp guy who came up with this theory that got coverage in CNN/Money and was picked up by CNBC.

His stock market background probably explains his reason for taking the investor/condo approach to analyzing the real estate market. He believes that it is all about the investors because they are not emotional and condos are more homogeneous so they can be more readily compared.

So investors and condos lead the way because its easier to measure appreciation?

I think there is a great need by investors, consumers, real estate professionals, the media and others to strip away all information on real estate markets until you get to the:

Magic Real Estate Market Indicator

You know, that one indicator that makes us feel warm and fuzzy inside knowing that we have the inside answer. Well, guess what? It doesn’t exist.

Investor Angle

The argument goes that investors research and interpret at the market clinically, without the emotional reactions that consumers and are simply looking for the return on investment (that makes so such sense or we would have never experienced market corrections in stock markets). Now imagine using the stock market indexes to estimate the value of your specific stock. i.e. the Dow Jones Industrial Average to price your Microsoft shares. It would make no sense.

Since I analyze a real estate market based in an international financial market hub (NYC) there is a great deal of efficiency because that is the orientation of many.

Here’s a few reasons why the stock market/investor activity doesn’t correlate to the real estate market:

  • Stocks operate in highly efficient markets, trading in thousands of shares per day
  • Transaction costs are low
  • Investors can move in and out of a position in seconds
  • Investors in the housing boom were carpenters and nurses rather than institutions.

Condo Angle

That being said, lets now look at investors and condos.

Individual real estate investors are more likely to purchase condos rather than single family houses. They are usually looking at cash flow after rental or appreciation. This is how publications like The Economist do it. They look at the relationship of rents to housing prices, assuming that investors are a major force in the market. But what if they are not?

Here are some basic problems with condos as an indicator:

  • Condos are not only purchased by investors. They are purchased as a primary residences as well so they have the same irrational influences the single family housing market.
  • Investor buying patterns and motivations are different than someone purchasing for owner occupancy.
  • Investors represent a minority of home purchases (In the investor peak year of 2005, NAR reports 28% of purchases were by investors). How can 28% speak for 72%?
  • Condos are a different price point than houses in most markets and they are usually less. That is a different demographic with different motivations for purchases.
  • Condo developments generally have different locations than single family houses. They are often in urban settings or other higher density areas where individual houses would not be viable. They enable to maximize the value of sites that are in locations less marketable to single family houses such as adjacent to commuter train stations.
  • Data for condos shouldn’t be any more difficult to get than houses are if they are both considered real property.
  • Condos are not necessarily homogenous and easy to compare. I think argument also sees condos as mainly newly developed but they have been around for a long time. True, the value differences between units in the same line are less likely to vary much in value within a few years after development. But what about older condos? Do we exclude them as well? If we exclude them we have more narrowly defined the market and therefore, less usable for other markets.
  • Condo markets in the major metro areas that reported highly unusual investor activity such as Washington DC, Miami, Las Vegas and San Diego are not representative of the overall markets in their areas. For example, an investor that can’t make their payments because they can’t rent out their unit for as much as the mortgage payment are going to work harder to protect their primary residence.

In Adam’s defense, I think he was trying isolate appreciation in order to see how the market is doing.

In other words, a new condo will like not be upgraded within a few years after purchase. So the change in value over this period would be attributable to appreciation, not some sort of improvement made to the property.

  • Passive appreciation – appreciation that comes from changes in market conditions
  • Active appreciation – appreciation that comes from improvements to the property

Also it is unlikely that the size of the unit would change (unless combined with an adjacent unit), unlike a new addition added to a house. This is a valid concept, but as an indicator, it can only apply to the market being measured, because any other similarities are merely coincidence.


Tags:


[In The Media] CNBC Morning Call Clip for 1-25-07

January 25, 2007 | 3:18 pm | Public |

Here is a clip of my appearance on today’s Morning Call show on CNBC.

The topic was brought about by Adam Koval, who runs Socketsite.com, a web log that covers the San Francisco housing market. Adam’s theory is that the condo market is a good indicator of the health of the overall housing market. This was covered in a CNN/Money article by Les Christie called Condo prices reveal housing trends: Comparing condo prices may be the best way to gauge the direction of housing prices. and I was quoted as not agreeing at all with the premise.

The CNN/Money article interested CNBC and they invited us both to appear in conjunction with NAR’s housing stat release for December. Adam and I have traded emails and we are on each other’s blog roll but I never knew what he looked like until we went “split screen.”

He and I were interviewed on CNBC Morning Call by Mark Haines who was great as usual.

As is the way on television, there was not enough time for the topic but it was fun to do. I was itching to respond to the last question but we ran out of time. Since I don’t agree at all with Adam’s premise I’ll present my argument as a post tomorrow.


Tags: ,


[In The Media] CNBC Morning Call Clip for 9-25-06

September 25, 2006 | 3:09 pm | Public |

Here is a clip of my appearance on today’s Morning Call show on CNBC.

I was guest along with Nicolas Retsinas, the Director of Harvard’s Joint Center for Housing Studies. We were interviewed by Mark Haines who was great.

As it always is the way on television, there was not enough time for the topic but it was fun to do.


Tags: , ,


Carnival Of Real Estate Enters The Matrix

September 25, 2006 | 12:01 am | |

As I watched my turn get closer and closer to hosting the Carnival of Real Estate, I thought it was amazing how much great content is being pushed into the public domain every week through the carnival. In fact, carnival participants simply ooze creativity and new ideas. Simply look at last week’s carnival post at BlueRoof.com Blog to get an idea of what I mean.

I started getting post submissions early last week and by Sunday I had a lot of reading to do. Although the carnival hosts are expected to post only their favorites, I thought to myself, how can I do that? So I decided to provide a top ten list and then everyone else. I excluded a few get rich quick posts and those who seemed to be more interested in selling something or extra posts from those who submitted more than one.

I am finding that some of the most active and insightful posts this week have been provided by real estate brokers. Its interesting to me because its been my impression that real estate brokers were somewhat late to blogosphere party as a profession but now they really get it and are rising in numbers quickly.

So its no wonder there was a lot of discussion about Redfin this week. I think that a weaker housing market sort of forces the real estate brokerage community to rethink the status quo. Thats really refreshing and I found myself adding links to my blogroll.

The Matrix Top 10 List

  1. Everybody’s Going Local [Future of Real Estate Marketing]. Joel Burslem provides a very insightful look at the trend toward local web sites to deliver real estate related information.
  2. What Housing Bubble? [The Property Monger] looks closely at population trends.
  3. 16 Words or Less [Agent CEO] reminded me of the axiom less is more. I tend to fail miserably being concise but if someone leaves me a voicemail longer than 16 seconds, I tend to delete it.
  4. Crackdown on Relisting Homes [Altos Research]. Altos crunches the numbers. Relisting is simply wrong.
  5. Kicking the Tires on Housing Futures as a Predictive Tool [True Gotham]. Doug Heddings deals with one of my favorite topics, housing futures.
  6. Google and Zillow [Real Central VA]. Jim Duncan tells us that broker _marketing will become less and less a component of a Realtor’s core competency. Representation will._
  7. Cease and Desist [Real Estate 2.X] gives us a good chuckle and a whole new way to name our blogs.
  8. Dual Agency: Using the Seller’s Agent as Your Buyer’s Agent [Searchlight Crusade] addresses awkwardness and multiple loyalties which are commonplace.
  9. Would the Founding Fathers Have Founded an MLS? [Charlottesville Area Real Estate Blog] concludes that restrictions on listings are better than an open system.
  10. For real estate promotion, the business card form factor is a tiny little workhorse [Bloodhound]. Glenn says its all in the cards.

Here are the rest of the posts submitted in no particular order but are all a good read:

Market discussion (surprisingly quiet this week)

Raising the bar on the real estate brokerage profession:

Broker ethics and “get rich quick” schemes

Mortgages and Refi Strategies

New brokerage business models

Buyer and seller advice

Defies categorization

Thanks to all of those who submitted posts. Great stuff. Don’t forget to check out YoChicago, next week’s host for the Carnival of Real Estate.

Its now 10:30pm EST on Sunday. I’ve got to get some sleep – going to be on CNBC’s Morning Call live at about 10:15am on Monday for 5 minutes with another guest. Should be fun.


Tags: , , , , , , ,


[Media Chain-links] 2Q 2006 Manhattan Market Overview

July 6, 2006 | 6:07 am | | Radio |

The 2Q 2006 Manhattan Market Overview that my appraisal firm, Miller Samuel, prepares for Prudential Douglas Elliman, was released today. Each quarter I place links throughout the day of publication to make it easy to compare how each media outlet (big and small media, blogs) presents the exact same set of data.

Even more interesting to me is how the other real estate brokerage companies who write alternative reports, frame their comments in the articles. While I have not had access to their specific results, I understand that some of the statistics such as average sales price, differed from the results in our report. Some of the reporters that cover the real estate market in New York have expressed frustration at trying to discern what actually happened this quarter.

To view the actual data and charts (going live by noon Friday 7-7-07). The actual report pdf will be available next week.

This list is in no particular order and were generally presented when I found them. I included some of the duplicate news feeds because I found it interesting who picked up the story. I will keep adding to the list through the remainder of the week.


Little Shift in Prices of Manhattan Apartments [NYT]
Manhattan Has Most Apartments for Sale Since 1994, Report Says [Bloomberg]
Mixed messages on Manhattan home prices [CNN/Money]
Manhattan apt. price hits record [NY Daily News]
Disparities in Manhattan apartment prices show a market that is neither booming nor busting [NY Newsday]
Condo Expectations May Be Rethought As Prices Plunge [NY Sun]
Manhattan apartment prices leap despite sales drop [Reuters]
Manhattan real estate inventory grows [Inman]
NYC Housing Prices Keep Climbing [TheStreet.com]
Manhattan condos again outsell co-ops [The Real Deal]
Sales drop, prices rise in Manhattan market [The Real Deal]
2nd Quarter 2006: “The Boom is Done” [The Real Estate]
Manhattan housing prices up [USAToday (Miller Samuel)]
Brokerages Submit Reports, Hope to Avoid Summer School [Curbed]
Manhattan Apartment Price Hits Record Highs [All Headline News]
Investing: Rising rates depress N.Y. apartment sales [IHT]

_Duplicate News Feeds_
Sales mellow in Manhattan [Houston Chronicle]
Manhattan apartment prices leap despite sales drop [Yahoo News]
Manhattan has most apartments for sale since 1994 [The Journal News (Westchester, NY)]
Manhattan apartment prices leap despite sales drop [Washington Post]
Sales of Manhattan apartments falling [Sun-Sentinel]
Apartments On The Market In Manhattan Hit 12-Year High [Tampa Tribune]
Manhattan apartment prices leap despite sales drop [MSN Money]
Manhattan apartment prices leap despite sales drop [7KPLC (Lake Charles, Louisiana)]
Manhattan apartment prices leap despite sales drop [Wave3 (Louisville, Kentucky)]

Here are a handful of radio and tv spots as well – more to come.


[Bloomberg TV]

[WPIX WB11]

Morning Call [Bloomberg TV]

Bloomberg Morning Markets [Bloomberg TV]

Squawk Box [CNBC]

News at Ten [WB11]

News at 5 [Fox 5]

WSJ Report [WCBS Radio]
NPR poor fidelity – better clip coming [WNYC]


Tags: , , ,