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My goodness, was that easy. Did you hear? The housing correction is over. Our long national nightmare is finished, almost before it even began. It must be high time to jump whole-hog back to all those former lovers:
The Business Press Maven is, as you probably guessed, being his normal haughty, sarcastic and by-and-large intolerable self. But who on God's green earth can blame me?
As you know, The Business Press Maven is always highly critical of the business media for allowing a pattern of three to qualify as a trend. But apparently now two can do the deed. The National Association of Realtors reported that sales of existing homes blipped up 0.6% in November, following a 0.5% increase in October.
How did those modest little facts play?
In its lead, the
that "the worst of the downturn for the battered housing market may be over." Lower down, it hedges, mentioning those ever-present and always plural "analysts" who say that "this year's slide in housing is starting to bottom out." The Business Press Maven seconds that with his first-ever ironclad guarantee. After all, with today being the last business day of the year, the housing market doesn't have too much longer to slide in 2006.
also ushers in
a new era of stability, at least on paper (or, more accurately, in pixels), with what passes as reason: Wall Street was wrong, so it is right. "The National Association of Realtors said the pace of existing home sales rose 0.6 percent in November to a 6.28 million-unit annual rate, defying Wall Street forecasts for sales to ease slightly and providing the latest suggestion that housing activity was stabilizing after a steep drop." The
even adds vestiges of housing-market insanity, disguised as a qualifier: "However,
analysts cautioned not to expect a sharp rebound."
Even the 800-pound gorilla of conventional thought,
The Wall Street Journal
, got in on the revival act right there in a headline: "
Home Sales Bode Well for Big Picture: Second Consecutive Rise Points to Limited Fallout From Market Slump in 2007
." By only the fifth paragraph, we are in the thick of an imaginary scenario: " If the housing slump is indeed bottoming out and starts to reverse itself in the months ahead, it would..."
With that bit of pretend and excitement from the most influential and stately business paper in the nation, I guess it's time for full disclosure. Few have benefited as much from the housing market as I, so every fiber of my being wants it back.
In the mid-1990s, I bought a modest two-bedroom apartment in Greenwich Village with a fireplace and river view you had to squint to enjoy. By the end of that decade, I had put my large two-bedroom apartment with expansive river views on the market and more than tripled my investment. I used the profits to buy a three-bedroom house in an expensive though self-consciously understated New York City suburb -- and my investment in
has more than doubled in value. If this insanity would only continue, I'll be typing out this column from a mansion in the Hollywood Hills before too long. But -- damn reality -- it won't.
How do I know? Because I've compared the breathless declarations of an instant return to fine real estate fettle with the
The article's headline is an appropriately tempered "Existing-home sales edge higher in US." But it's the lead that gets to the heart of the matter: "Sales of existing US homes rose slightly in November, though activity in the crucial southern market remained depressed in a sign that the nationwide market has yet to reach its nadir."
Many members of the business media are, like The Business Press Maven, based in the Northeast, which did OK in the latest survey. But the future of new-home sales appears to be centered where we ain't -- the South and Southwest, which still appear weak.
Adding to this small countermovement of basic common sense is
Nicholas Yulico. I usually hesitate to highlight an article from
, if only to avoid charges of favoritism. But in some cases, such as this one, I can't help it.
Every down market has those brief blips up, the fools' rallies that trap the ever-hopeful. And homebuilder stocks have, Yulico points out, rallied some from their lows of late. But in the South and Southwest, he rightly says, watch those land charges. A lot have been taken of late, but even those companies that have been taking them (hello, Hovnanian) are assuming there will be none going forward.
A year ago almost to the day, The Business Press Maven warned readers about all the overblown excitement regarding Howard Stern's arrival at
and, by extension,
( XMSR). The business media framed the situation like this: Either satellite radio or terrestrial radio would prevail, probably the first because of Fartman. Investors listened, and satellite radio stocks were briefly the belles of the market ball.
The Business Press Maven said it was not an either/or situation and that both would fail. Though it is haughty and intolerable to say so, once again I appear to have been right. As the year ends, the satellite radio stocks, like the housing stocks, have traded up off their lows. And we see the business media spinning their wheels
, attempting to justify the rise as being the result of substance more than a dead-cat bounce.
But I cast my lot for satellite radio as with homebuilding: with the dead cat. Happy New Year.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.