Tuesday, August 26, 2008

Two of my favorite blogs

If you are looking for folks who nailed the housing meltdown well before it was making headlines, then you need to follow thehousingbubbleblog and calculatedrisk. Although there are many good blogs who contributed, these were the two that made it clearest to me that something was amiss.

CalculatedRisk is especially good at spin-free data, like today's Case-Shiller numbers. While a bunch of headlines were trumpeting expectations-beating performance, CR shows the raw data (and the data are not pretty). Even though the number beat expectations by 1.9%, the market seemed to have taken this as a positive.

Frankly, I think that the worst drop in the history of Case-Shiller is terrible news for the solvency of many banks, and beating the expectation by less than the error in the measurement is not cause to run out and buy madly. But that's just me.

As for The Housing Bubble Blog: Ben Jones has a knack for finding regional anecdotes. After reading for a while, you will get a sense of where most of the country is in the meltdown. Ttoday for example:
“Take Holiday. Energized by furious flipping, the median home sales price peaked at $130,000 in early 2006. By the first half of this year, the median price had hunkered down at $75,000. That’s a drop of 42 percent, one of the county’s worst.”

‘It became investor heaven. Now it’s turned into investor hell,’ said Greg Armstrong, president of the West Pasco Board of Realtors. ‘People didn’t want to be left out, but they got burned instead.’
Areas that are not as far along in the meltdown will not have local stories like the above, so it is good information to see what might be coming down the pike.

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