Wednesday, April 16, 2008

It’s Always Good News (When You’re The Trade Association’s President!)

Is Nashville’s real estate bubble bursting? I would say yes, it is:
There were 2,227 home closings reported for the month of March, according to figures provided by the Greater Nashville Association of Realtors®. This represents a decrease of 28.7 percent from the 3,126 closings reported for the same period last year.

Numbers for the first quarter were 5,763 closings, down 27.8 percent from the 7,990 closings during the first quarter of 2007.

We’ve been seeing these reports month after month in the local paper for the past year and a half. But you wouldn’t know it from reading local real estate cheerleader columnist Richard Courtney, who in addition to writing for The Tennessean, Nashville Post and the Nashville City Paper, was also 2007 president of the Greater Nashville Association of Realtors .

Consistently Courtney has put a happy face on these dour numbers in columns and interviews, as one would expect from the GNAR president. But why didn’t our newspapers counter this industry source with a less, you know, biased perspective? (And why did the Tennessean and the City Paper think it was OK to give an industry rep a column, anyway?)

In the face of all evidence to the contrary, Courtney’s columns and statements to the media have been unfailingly sunny, and reporters interviewing Courtney have never questioned his reasoning. Every piece of bad news is always accompanied by the “but it’s actually good news because ....” codicil. It would be funny if it weren’t so irresponsible.

Want a trip into the memory hole? Let’s start with January 2007:

January home sales dip compared to 06 figures

With home sales either stagnant or tumbling in many markets nationwide, the Nashville area saw a similar lack of vigor last month, as there was a 3.4 percent dip in transactions compared to numbers from January 2006. According to figures provided by the Greater Nashville Association of Realtors released Monday, the multi-county area registered 2,289 home closings in January, compared to 2,371 closings reported for the same period last year. On a similar theme, the median price for a condominium unit remained flat when comparing same-month numbers.

Despite the sluggishness, the January 2007 numbers represent the second-best January since GNAR began totaling figures in 1977.

“The real figure is that other markets are down 15 to 18 percent, so we are bucking the national trend,” said Richard Courtney, GNAR president. “The reality of the market is that we could not sustain the extremely healthy pace we enjoyed the past 15 years.” Courtney, who writes a real estate column for The City Paper, said the healthy growth of the past few years has cushioned the market so as to experience a contraction with minimal pain.

“These figures are actually very encouraging,” he said. “They confirm that the market remains active and the level of home sales is being sustained as the year begins.”

Actually, a decrease shows the level of home sales is, you know, down. And if January 2007 was the second best January since 1977, and those sales were down from the previous year, that must mean January 2006 was the best year ever. That means we peaked in 2006 and started a down cycle two years ago.

You’d think a real estate columnist/source would tell us that, but I understand that Courtney was in a tight spot: torn between telling the truth to newspaper readers, and being the industry cheerleader his GNAR job required.

Sales continued to slide in April 2007. Still, Courtney looked on the bright side:

Nashville-area April home sales dip 7.6%

“What were acknowledging is that 2006 was an anomaly,” said Richard Courtney, GNAR president. “We might not see those [2006] numbers again next year or the next.” Still, Courtney said the numbers to date this year are encouraging. “The fact is that our cumulative numbers show this is the second best year-to-date so far,” he said.

By July of 2007, Big Shitpile was exploding all over the country’s real estate market. Foreclosures were on the increase:

Foreclosures pickup nationwide, statewide

Call it one more sign that Nashville’s red-hot housing market could be slowing down.

Or filling a demand, depending on how one sees it.


Because many, if not most, foreclosures are on lower-priced houses, Courtney said they could ease the crunch in the “affordable housing,” $160,000-and-lower price point.

“We probably have the demand to handle that,” said Courtney. “Some of that inventory might be welcome.”

Dude, give me some of what you’re smoking! But this is all ancient history. An entire year has past since Courtney donned his rose-colored glasses and told us all to relax! It’s good news that home sales are down!

Here’s Courtney’s Friday “Tennessean” column:

Sales in the Greater Nashville area are down a whopping 28.8 percent for March compared to March of 2007.

This information was provided by the Greater Nashville Association of Realtors.

Oddly, the prices are rising. Sales are down and prices are rising. James Taylor once wrote "well, the sun is surely sinking down, but the moon is slowly rising. So this ole world must still be spinning 'round." And so it is in Nashville.

For the year, sales are on an upward trend with 1,644 units in January; 1,892 in February; 2,225 in March; and 2,316 pending for April. And the sales numbers always surpass the pending number.

So, sales in units are down as compared to year to year, but more homes are selling each month than the previous month, a minimum of four months of increasing sales.

Oh Richard, always looking on the bright side of life. Surely it isn’t news that sales in April are higher than sales in January, February or March? It’s always that way! And right after he blamed February’s drop in sales on cold weather! It’s still down from last year, and that’s not good.

I don’t mean to pick on Richard Courtney, whom I’m sure is a nice person. I do mean to pick on this habit of the news media--local and national--of putting industry cheerleaders in the position of industry expert. They are not the same thing. I realize being an industry cheerleader is all part of the job for an association president--what’s wrong with the City Paper and the Tennessean? Courtney’s cheery analyses of the Nashville real estate market were never countered, challenged or even questioned.

I have friends who read these sunny reports and thought Nashville was immune to the real estate crisis who are now in some serious financial trouble. And GNAR has a new president now and she’s peddling the same shit:

"The number of closings is down significantly compared to last year, but the fact that home prices are rising is a good sign that the Greater Nashville market remains stable even in this time of market transition," says GNAR President Mandy Wachtler in a news release.

Please, Tennessean and City Paper, do not give Mandy Wachtler a real estate column. People need real, unbiased information about the real estate market, not fairy tales.