WSJ’s main home prices ‘cooling off’ writer now admitting they are going up on most of the US.

Big article in the WSJ today about the median home prices of east-of-Colorado homes going up while median home prices in and west of CO went down.

Who says so? Black Knight, Inc. Who are they? I don't know. Never heard of them. But one of the names sports writers have used to describe the football team of my alma Mater West Point is the Black Knights of the Hudson. And indeed, the chairman emeritus of Black Knights is a West Point grad.
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Internet says they are a home ownership software and data analytics company. I still never heard of them. The three big home price entities are NAR, FHFA, and Case-Shiller.

Meaningless east west home price differences

I know of no significance of this east/west difference. And it must be noted that the national media home price is $363,000 according to NAR. And the San Francisco median was $1.465M according to CAR.

The more meaningful discussion might be why the SF median is triple the national median and double the eastern median.
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The fact that one month's prices has an east-west difference may be meaningless. I believe there is a web site showing all sorts of ridiculous correlations that mean nothing to prove the statisticians' nostrum that “correlation is not causation.” There are many coincidences in life that are wrongly interpreted as causative.
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The author Nicole Friedman has been pounding away for months at the theme that higher mortgage interest rates make home prices fall. I have been criticizing her for months for that and other things.

Mortgage interest rate increases do not make home prices fall

There is some logic to that notion, but you have to check the empirical evidence to make sure. In fact the highest mortgage interest rates even were in 1981 and prices did NOT go down then. They went UP.
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In today's article Friedman finally felt obligated to admit that a recent period saw home prices and mortgage rates move in the same direction—contrary to her theory.

Unit sales are irrelevant

She also likes to point to lower unit sales as evidence that home prices are falling. Bull! Unit sales are just how many homes sold in the month. They are unrelated to home PRICES. I keep saying no one cares about them other than mortgage originators, realtors, title companies, and sellers of furniture and appliances. Guess what? That bit of information has now appeared in her article.
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She is plagiarizing me and taking credit for it. More Friedman integrity on display.

Home prices going down, she said; now she says they are up

And look at the big, but unacknowledged contradiction in this article. She has been saying home prices would fall because of interest rates and falling unit sales and other irrelevant data. Now she celebrates prices going UP in the east.
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Which is it?
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Wait a minute. Where's the "I, Nicole Friedman, have been telling you that home prices were falling or would fall any day now. Now I'm celebrating eastern price rises without mentioning they prove I have been wrong all along."

‘Affordability” is a crock

Then there is Friedman's discussion of "affordability." What utter nonsense.
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Let me tell you what "affordability" really is. If you sell a house and the buyer closes on it, it must have been affordable by definition. The absence of "affordabilty" is manifest by your buyer failing to close because of inability to get a mortgage or come up with enough cash.
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Duh.
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But years ago, the Realtors invented a definition of “affordability” based on obvious apples and oranges as a trick to shame Congress into passing more laws to make it easier to buy homes.
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Their trick was to define “affordability” as what it was the best year the Realtors ever had as the 100 base in their “affordability” index. In other words, any year worse than the Realtors best year ever is a crisis caused by Congress not making it easy enough to buy a home. Then they say “affordability” is when the median income needed to qualify for an 80% mortgage lets you buy the median-priced home in the metro area.
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But wait a minute. Since when can the median income buy the median home. Home buyers are roughly the top 68% of income owners. The lower-income people rent. Claiming homes in an area are not affordable if the median adult income there cannot not afford the median home implies that all adults are homeowners, and that lack of "affordability" is rendering many people homeless. It’s rendering them tenants. Sort of the normal thing you would expect.
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Silly dishonesty on the Realtors' part.

If it sold, how could the price have been unaffordable?

At one point Friedman says the median home price was unaffordable. That's a nonsequitor. If it was unaffordable, who the hell bought it to produce the sale price that established the median price? All homes are unaffordable to thousands who could not and did not buy them. Goes without saying. Also, obviously irrelevant.
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Friedman’s “analysis” of why prices recently went up a lot in Hartford and Buffalo: because the homes there were “more affordable” and there is a “limited supply.”
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Oh, really. Pray tell, did the homes just become affordable after not being affordable? They would have had to in order for affordability to explain the recent appreciation in price.

Ghetto home appreciation sometimes leads the nation

The plain fact is that Buffalo is a Rust Belt sad sack. Its prices have long been low for that reason. $172 K is the recent median price there. I used to have a Realtor friend who worked in my birthplace: Camden, NJ. I was a Realtor in adjacent Collingswood, NJ.
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I jokingly asked him if he was a member of Ghetto Multiple Listing Service. Camden was the cover picture for a Time magazine cover story on inner-city high-crime ghettoes once. He shot back, “We had 10% price appreciation last year. You guys in Collingswood only had 4%.”
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True, I found after I checked. So it is quite normal for various awful metro areas in terms of places to live to occasionally lead the nation in appreciation. It is meaningless. The fact is Buffalo is one of the lowest priced metro area—was, and still is. A higher than US average appreciation rate for one 12-month period is meaningless.
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I do not know Hartford, but my impression is that it is simply another big old Rust Belt city gone bad and likely its brief spurt of appreciation is also meaningless.

Supply that did not changed caused price increases???

Friedman’s other statement that home prices went up in Buffalo and Hartford because of some RECENT change in restrictive land use laws in those cities. No such thing happened. In fact, land use laws are most restrictive in CA and second most would be various other blue states. NY and CT are blue, but they did not adopt a flood of bad land use laws recently. Friedman is claiming a recent change in home appreciation rates there was caused by a static land use law situation which has not changed in memory.
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Bull! What is the REAL reason Buffalo and Hartford recently had a spurt of appreciation? Probably nothing. Like why did it rain here on Tuesday? No particular reason. On some Tuesdays here and there, it rains. In almost all US cities, home price appreciation rates lurch ahead in some months and fall behind in others.
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Not every momentary moving twelve-month average change in appreciation rates in meaningful. And if Friedman is going to say B changed because A changed, she needs to first see if A DID change. In this case, she attributes changes in Buffalo and Hartford appreciation rates to “affordability” and limited supply which absolutely were long-term static. That is nonsense.

I’m right because I found an economist who agrees with me

Reporters, who lack subject knowledge or experience, nevertheless come up with some cockamamie theory then go look for “experts” who will give the reporter a quote that fits the reporter’s half-baked theory. Friedman finds economists who will give her such quotes. Anyone who believes anything about the future can find some economist to confirm that prediction.
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Her frequent use of economists implies they have expertise. Really? First I’ve heard. I googled “economists making incorrect predictions.”
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https://www.marketplace.org/2021/07/22/when-economic-predictions-are-wrong/
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https://www.theguardian.com/money/2017/sep/02/economic-forecasting-flawed-science-data
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https://www.theguardian.com/money/2017/sep/02/economic-forecasting-flawed-science-data
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https://aeon.co/ideas/too-much-theory-leads-economists-to-bad-predictions
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That last one sound like it was written about Nicole Friedman. She is all theory and no consideration about what happened in the past.

All caused by tech downturn

Friedman has a new theory. CA home prices boomed because tech boomed and tech is CA. Now that there are layoffs in high tech, home prices in CA are falling.
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It’s that simple? CA has 40M people. It is a little bigger than Canada. Are we going to say that home prices moved in one direction at some point in time in Canada because of layoffs in one industry there?
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CA is a vast, multifaceted, nation-like place. It is the bread basket of the world—the state’s #1 industry, the entertainment capital, an oil state, a vacation travel destination, an aircraft and space state. Tech is the fourth biggest industry in CA.
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One reason why homes in the West may have gone down is Democrat big city mayors allowing crime, drugs, homeless, CRT, horrible schools, and woke to destroy the cities of LA, SF, Portland, and Seattle.
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The last man-on-the-street sentence of Friedman’s article is
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“Any talk of the market coming back to reality, or at least cooling off, coming down, is not playing out in this [NJ] area.”
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You know who the main person saying these doomsday things was? Nicole Friedman. Indeed, I think her last article before this had the phrase “cooling off” in its headline. I criticized that article, too.
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I have criticized in print maybe a dozen or more of Friedman’s “cooling off” articles as being poorly analyzed and poorly researched. She has gotten slightly better in this article, in part by quoting my prior articles about her, but now she takes credit for those words of mine by not using quotes or attribution.
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Unbelievable.
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Buy a principal residence with a mortgage now.
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