Wednesday, February 22, 2006

Warren Watch - Home prices set to fall

Regular readers know that I keep tabs on a number of local journalists that I've tagged as being industry cheerleaders. These journalists routinely write puff-pieces praising real estate and urging people to buy without regard to caution. One of these cheerleaders is journalist Warren Boroson.

Here is his most current piece:

Author: Home prices set to fall


There I was, bopping through the aisles at a Barnes & Noble, when what do I see?

A book called "SELL NOW! The End of the Housing Bubble."

The publisher is a respected name, St. Martin's Press. Copyright 2006.

So I bought it. And read it.

A strange book.

...

The author predicts that house prices will fall off the table, returning to their 1997 levels. All over the developed world.

Houses in New York and northern New Jersey will lose 44.6 percent of their value, falling from an average of $454,522 (in 2005) to $252,028 during the next five to seven years.

...

Anyway, my response is that people pay a lot of money for houses because houses are nice. You become the king of your castle; by paying down your mortgage, you own more and more of that castle -- instead of making your landlord richer.

Yes, it's clear that house prices in some areas are softening now. And maybe some people would be better off selling. But what a hassle!

...

And he may turn out to be totally correct, although I doubt it.

But if he's right, he will have made a self-fulfilling prophecy. If everyone who reads his book does what he advocates, the real-estate market will indeed be in serious trouble.


--------------

Now, after you've read the article (or the highlights I've posted here). Take a look at this piece:

Is it time to cash in on your home?

Who else might want to seize the opportunity to take profits? Anyone with more house than they really need. Warren and Rebecca Boroson bought their Glen Rock, N.J., home 29 years ago for $69,900 and raised their two sons there. But now, says Warren, "our children are grown and out of the house. We had four bedrooms, which is three more to mess up than we needed." Last year the Borosons sold for $579,000 and moved to a high-rise apartment in Hackensack, N.J., with a doorman and a swimming pool. [a rental]

"We sold mainly to lock in the profit," Warren says. "It was a little faster than we’d planned. But if you’re planning to sell in a few years, you might as well do it now while you’re sure the market is still good."

Warren writes a financial column for the Morris County, N.J., Daily Record that is syndicated nationwide. With an eye on retirement (he’s 69),
he invested his cashed-out home equity in a laddered portfolio of bonds.

-----

I have a bit of concern with one small piece of the article, I'm not sure if it's just the way I'm reading it, but it comes off as a slam against the book's author, John Talbot.

By the way, the author is someone named John R. Talbott. He is identified on the book's back cover as a best-selling author (he wrote another book, called "The Coming Crash in the Housing Market"), was a visiting scholar at UCLA's School of Management and was an investment banker at Goldman Sachs.

Whether he has any real-estate experience, whether he graduated from college and whether he has any advanced degrees is not disclosed.

This really seems like a below-the-belt slam against Mr. Talbot. A quick search on the web finds the following bios:

John R. Talbott is an economic consultant who has authored academic papers on economic growth and development and made presentations on the subject to the governments of Russia, Jordan, and Qatar. A visiting scholar at the Anderson School at UCLA, Talbott is also a former vice president in the investment banking division of Goldman, Sachs, and Company.

Here are two of John Talbot's academic papers:

The End of Class Warfare: An Examiniation of Income Disparity
Political and Economic Freedoms and Prosperity

Not sure why a journalist would make such a rash assumption about someone's education and background and not just do a little leg work to find the real facts. I suppose that if you can't argue the facts, resorting to insult is the next best thing...

Caveat Emptor!
Grim

42 Comments:

Blogger Grim Ghost said...

It would be very unusual for a Goldman Sachs VP to not have at least a bachelors from an elite school, and quite possibly an MBA from an elite school. It would also be very unsual for a visiting scholar at a top business school like UCLA to not have at least a masters, possibly even a Phd.

2/22/2006 08:52:00 AM  
Blogger grim said...

Consumer Prices in U.S. Increased 0.7% Last Month

Prices paid by U.S. consumers rose in January by the most in four months, a sign companies are having more success passing along rising costs to their customers.

...

Economists expected a 0.5 percent increase in the consumer price index, based on the median of 68 forecasts in a Bloomberg News survey. Forecasts ranged from increases of 0.2 percent to 0.6 percent. Core prices were forecast to rise 0.2 percent.


grim

2/22/2006 09:09:00 AM  
Blogger grim said...

gg,

Agree 100%.

grim

2/22/2006 09:11:00 AM  
Blogger Metroplexual said...

This comment has been removed by a blog administrator.

2/22/2006 09:22:00 AM  
Blogger Metroplexual said...

"By the way, the author is someone named John R. Talbott. He is identified on the book's back cover as a best-selling author (he wrote another book, called "The Coming Crash in the Housing Market"), was a visiting scholar at UCLA's School of Management and was an investment banker at Goldman Sachs."

Is that the famous Anderson School that has nailed the bubble in tech stocks in 1999 and more recently the housing bubble in 2005? I think the author has way more street-cred than Warren Bozo-son

2/22/2006 09:24:00 AM  
Anonymous Anonymous said...

Unrelated, but can you sue a realtor for misrepresentation?
On the coldwellbanker website the same house is listed 3 different times (zip code 07401). Twice for $769 and once for $549. The feature photo on each listing is the same, showing the front of the house. The interior photos on the $549 listing are different. I would love to walk into the office and put a bid on the house for $549 and when they tell me its not available tell them they're going to be sued for false advertising.
Any suggestions?

2/22/2006 09:29:00 AM  
Anonymous Anonymous said...

Anon wrote:

"On the coldwellbanker website the same house is listed 3 different times (zip code 07401)."

Do you have the 3 links?

Could be a glitch, and I believe every listing from every realtor says the following: "information deemed accurate but not guaranteed."

2/22/2006 09:39:00 AM  
Anonymous Anonymous said...

Here;s the one for $549

http://www.coldwellbanker.com/servlet/PropertyListing?action=detail&ComColdwellbankerDataProperty_id=9049198&page=property

2/22/2006 09:49:00 AM  
Blogger grim said...

Hanlon's Razor..

Never attribute to malice that which can be adequately explained by error.

2/22/2006 09:50:00 AM  
Anonymous Anonymous said...

http://www.coldwellbanker.com/servlet/
PropertyListing?action=detail&Com
ColdwellbankerData
Property_id=9049198
&page=property

2/22/2006 09:50:00 AM  
Anonymous Anonymous said...

Its also listed on the GSMLS for $549
http://publicstage.gsmls.
marketlinx.com/templates/
media.asp?Uid=3211205&MlsNum=2107415

But I don't think it was just an error... I think it was intentionally done to pull more potential customers in.

2/22/2006 09:59:00 AM  
Anonymous Anonymous said...

Anon wrote:

"But I don't think it was just an error... I think it was intentionally done to pull more potential customers in."

Could be, I've recently seen Burgdorff change the zip code (MLS 2244112) after a crappy house sat without selling in the 'expensive' zip code where the house actually exists.

2/22/2006 10:14:00 AM  
Blogger grim said...

Those listings are both on the same street but have different house numbers. Seems like a mixup with the pictures.

grim

2/22/2006 10:14:00 AM  
Anonymous Anonymous said...

I continue to pictures of my living room from the house I sold last summer on the Coldwell Banker website. It was a great Living Room!

2/22/2006 01:21:00 PM  
Blogger annamelbourne said...

Warren Boroson should be careful who he criticizes. I doubt that his background could survive much scrutiny, should anyone be interested in looking into it.

2/22/2006 01:44:00 PM  
Blogger Marinite said...

Is it just me or does it seem like there is a war of words going on now. This book. Lereah's new book (or old book with a new title, I dunno, I'm not spending money on it), mainstream media articles. This market is hanging in the balance and the balance depends on public perception.

Marinite
Marin Real Estate Bubble

2/22/2006 04:17:00 PM  
Anonymous Michelle said...

It would be great if some of you eloquent and educated types would write some letters to the editor about this buffoon.

2/22/2006 04:21:00 PM  
Anonymous Looking said...

The Talbot book is interesting. I dug deeper on the book itself and Talbot does admit that he's let his anger influence the writing. I got this off of Amazon's summary of the book:

"As a guide for the average homeowner, this book is a convincing argument broken down into laymen's terms, albeit one fueled by bias: Talbott admits he, "allowed his anger and bitterness," to influence his writing, making it less a studied survey than a "creative analysis," as Talbott terms it"

I guess you can't fault him, many of us have the same anger or frustration. I would prefer the more studied approach though.

2/22/2006 07:12:00 PM  
Blogger Richie said...

Yes, I guess Warren can make opinions on other people's books. Especially when he's written about:


Warren has written about:

* Why blondes have more fun (light reflected from blonde hair shrinks the pupils, so observers see fewer facial imperfections)
* the etiquette of dueling
* the only signer of the Declaration of Independence who later swore loyalty to the British
* what psychoanalysts have said about Mickey Mouse (his androgynous persona doesn't threaten males or females)
* copyeditors from hell
* the best puns ever created
* the next nuclear war (a Delphi poll concluded: India vs. Pakistan)
* how he fell into the Jordan River
* the nasty card game called "Knuckles," which children once played
* a defense of Typhoid Mary
* social effects of first contact with aliens
* the social significance of graffiti
* why you cannot tax-deduct casualty losses caused by termites
* why people won't believe that Oswald did it alone.


Direct from his www.warrenboroson.com website.

Lovely, just lovely..

2/22/2006 10:54:00 PM  
Blogger eastcoaster said...

I predicted today (among a few co-workers) that prices in my area will correct to 2001 levels - particularly for the older, smaller, "starter" homes. I was met with laughter and mocking saying, "No WAY! They might drop a little bit, but there's no way they'll go back that low! Ha ha ha!" I said we'd have this conversation again at the bottom of the cycle and see who's right.

Is it absurd for me to think 2001 prices are about right for a correction? It's not as gloomy a forecast as Talbott's 1997 predcition (though I sure like his better!).

2/23/2006 12:52:00 PM  
Anonymous Anonymous said...

This guy is a clown. He acts if he is some smart financial writer but he invests in laddered treasuries. What a loser!

2/23/2006 05:41:00 PM  
Blogger ck986 said...

Am I missing something. Borson does not think there is a bubble yet sells his house at the very peak of the market. Hmm.

2/23/2006 08:23:00 PM  
Anonymous Anonymous said...

does anyone listen to this guy?
NOT!!

2/24/2006 05:24:00 PM  
Anonymous Anonymous said...

What a joke. Boroson flatly denies a bubble, yet pukes his own house. I love it! What a complete and total joker.

2/27/2006 03:06:00 PM  
Anonymous Rick J said...

I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.

Take a look at Wallstreetwinnersonline.com

RickJ

4/18/2006 10:31:00 PM  
Anonymous Anonymous said...

I don�t really have a useful comment on your site, but it was a nice break from my own real estate work. I just weanted you to know I enjoyed the visit and hope you can visit my site if you have a chance.

4/25/2006 02:50:00 PM  
Blogger Joe Berenguer said...

I just came across your blog and wanted to
drop you a note telling you, Friend, how impressed I was with it.
I give you my best wishes for your future endeavors.
If you have a moment, please visit my site:
loans center
It covers loans center related contents.
All the best!

5/05/2006 02:15:00 PM  
Blogger Joe Berenguer said...

Hi Blogger!I like your blog! Keep up the
good work, you are providing a great resource on the Internet here!
If you have a moment, please take a look at my site:
credit center
It pretty much covers credit center related issues.
Best regards!

5/09/2006 04:04:00 AM  
Anonymous Anonymous said...

Someone knows how to bring a lot of into your home, over a single weekend. Opportunity attracts them. Emotion captures them. Competition excites them. Their wallets open. Top dollar for your home pops out in an open bidding process that concludes on a single Sunday afternoon .

6/20/2006 03:14:00 AM  
Anonymous Anonymous said...

Blogging is not always a rewarding journey, but I ran across yours on this trip and it was a good break from my own real estate work. Thanks. Keep up the interesting work and visit my site if you have a chance.

6/20/2006 05:12:00 AM  
Anonymous Anonymous said...

. Noise does not sell well. Let the Realtor� and buyer talk, free of disturbances. Background "soft playing" music is okay, but the wrong sounds will turn buyers off. Noisy children and animals are roadblocks to a contract � and traffic, trains, and planes must be dealt with honestly, if they are part of the deal. Go here for more ideas.

6/21/2006 12:48:00 PM  
Anonymous Anonymous said...

With the , you don't have strangers coming through your home, day after day, often week after week, at times which are not always convenient. Your home must look great ... truly great ... for one weekend only .

6/21/2006 01:33:00 PM  
Anonymous Anonymous said...

Hint #7 for . Safety First: Keep halls and stairways clear. Avoid cluttered appearances and possible injuries

6/21/2006 05:36:00 PM  
Blogger Paul Adams said...

I was searching blogs,and I found your site.Please,
accept my congratulations for your excellent work!
If you have a moment, please visit my site:
credit center
It pretty much covers credit center related issues.
Have a good day!

6/22/2006 10:39:00 AM  
Anonymous Anonymous said...

With the , you don't have strangers coming through your home, day after day, often week after week, at times which are not always convenient. Your home must look great ... truly great ... for one weekend only .

6/22/2006 05:00:00 PM  
Anonymous Anonymous said...

Hint #3 for . Let The Sun Shine In: Open draperies and curtains and let the prospect see how cheerful your home can be. Dark rooms do not appeal. One trick which always seems to work is to replace 60-watt bulbs with 100-watt bulbs, and have your Realtor� turn them all on, even for a daytime showing (and off again after the showing).

6/22/2006 07:03:00 PM  
Anonymous Anonymous said...

Hint #3 for . Let The Sun Shine In: Open draperies and curtains and let the prospect see how cheerful your home can be. Dark rooms do not appeal. One trick which always seems to work is to replace 60-watt bulbs with 100-watt bulbs, and have your Realtor� turn them all on, even for a daytime showing (and off again after the showing).

6/26/2006 11:10:00 AM  
Anonymous real work at home business said...

Hi there Blogger, a real useful blog.Keep with the good work.
If you have a moment, please visit my real work at home business site.
I send you warm regards and wishes of continued success.

6/27/2006 08:00:00 AM  
Anonymous Anonymous said...

. Never Stay In Your House With House Hunters: Let the agent handle it, and remove yourself if possible. Remember that the Realtor� has worked many hours with these people, and knows what they're looking for, and how to work with them. Let the Realtor� do the job without interference.You may feel that an agent isn't showing the important features of your home to the prospect, but the agent knows people aren't sold by details until they've become emotionally involved with the "big picture" of your home. The presence of any member of the seller's family can't help. It always unnerves possible buyers. It often prevents a sale.
Go here for more ideas.

6/27/2006 09:56:00 AM  
Anonymous at home careers said...

I am here because of search results for blogs with a related topic to mine.
Please,accept my congratulations for your excellent work!
I have a at home careers site.
Come and check it out if you get time :-)
Best regards!

7/07/2006 04:38:00 AM  
Anonymous Anonymous said...

Debt Consolidation
Debt Help can help you reduce your interest burden by charging an interest rate lower than the rate on your existing loans. Debt consolidation loan can also allow you to make small monthly payments by extending the loan period
http://www.debt1consolidation.com
Debt Consolidation
Debt Help can help you reduce your interest burden by charging an interest rate lower than the rate on your existing loans. Debt consolidation loan can also allow you to make small monthly payments by extending the loan period
http://www.debt1consolidation.com

9/16/2006 01:07:00 PM  
Anonymous Anonymous said...

Debt Consolidation
Debt Help can help you reduce your interest burden by charging an interest rate lower than the rate on your existing loans. Debt consolidation loan can also allow you to make small monthly payments by extending the loan period
http://www.debt-consolidation.com

10/23/2006 07:06:00 PM  

Post a Comment

<< Home