The other shoe

Reading this article from CNN only confirms my belief that we have yet to see the full correction here in Utah. In the past we have trailed the rest of the nation in trends, going up after they peak and going down after they level out. The NAR and of course the UAR and nearly every talking head within their grasp is touting the end of the crash in complete defiance of every known principle of economics I have ever read. Well one of us will be right, an so far its not them.

Speaking of that…I have to mention here that just the other day there was an article pinned up on my friends cork board from the UAR titled “Utah market poised for gains in 2008″. My Uncle Jeff spent 15 or so years in New York as a commodities trader and was an innovator with-in his field as a trader of Weather Derivatives. Anyway, he has a phrase that they use on Wall Street called “talking your book”. It basically means that whatever it is you are selling you talk up.

Realtors call it puffing. In my experience Realtors just might be the most notorious book talkers of all time. Realtors talk their book religiously and it harms their credibility. Honestly I laughed when I heard the radio ad from the UAR talking about how strong the market is in Utah. Its a joke; The UAR not the market that is.

Bottom line, housing demand is directly proportionate to the availability of financing or cash. Since so few cash buyers exist, the availability of financing will be the principle driver of housing demand. Since the secondary market has not only not recovered, but has become worse I find it hard to understand just how the NAR and UAR foresee such incredible growth for 2008.

Well, half of that year has come and gone, and so far that article on my buddy’s cork board might be the most wrong article I have read all year…and I read a lot of the L.A. area rags before the Finals.