in last few days we've all been seeing news that housing prices are finally bottoming out, and will soon turn the corner and start back up. But stop and think for a moment: does this sound familiar?
Economist and investor Barry Ritholtz writes Ever since the data made it obvious — at least to us — that Housing was topping out in 2006, we have watched with various degrees of bemusement the annual ritual that is the erroneous housing bottom call.
Many casual observers of Housing (along with a few pros) fail to understand the difference between monthly seasonality and actual improvement. This first came up in March 2008, when the (Wall Street Journal) screwed the pooch on February 2008 existing home sales, incorrectly reported Wave of Foreclosures Drives Prices Lower, Lures Buyers. Actual (existing home sales) were down 23.8% year over year. The Journal was suckered by how the (National Association of Realtors) spinmeisters shaped the narrative, emphasizing monthly data (at least from March to September).
These bad calls reoccur every Spring, as the data begins its annual improvement. I use the phrase Perennially Wrong Bottom Callers and its acronym PWBC™ (I may have to trademark that!).
A reader doesn't have to get very far off the beaten track to realize that a lot of what we read in the whitebread media is frequently either inept and weak analysis or establishment propaganda. Or in this case, both. Ritholtz is not a radical anarchist-type economist, but he's impolite enough to point out that the same people trip over themselves every spring rushing to report the same good news they did last year.
Not one to make an unsupported assertion, Ritholtz backs up his argument/accusation by appending a long scroll of dozens articles from chronic perennially wrong bottom callers over the years, starting in '06. Every year, the same thing. Every year, the same people.
The US economy remains stagnant. There's nothing happening, and this is not the sort of money environment that gives any indication that a housing uptick is imminent.