BLOG VIEW: Last year, I wrote a review for the online cinema site Film Threat on a strange little movie called ‘Paul McCartney Really is Dead: The Last Testament of George Harrison.’ If this movie is to be believed, the late Beatle George Harrison recorded confessional tapes that confirmed the truth behind the outrageous ‘Paul is Dead’ claims that were promoted in the late 1960s. Yes, all of those backwards-played records, oddball album covers and whispers about differences in McCartney's appearance after 1966 were true – or so the film insisted.
I thought the film was a dull waste of time, and I spend a minimal amount of effort in dismissing its ineptitude – you can read my review here. What is really interesting, however, is what happened after the review was published. For nearly a year, the review attracted (and continues to attract) a heated response from people insisting that the ‘Paul is Dead’ hoax is not a hoax. Despite a total lack of serious evidence to support this claim – not to mention blatant factual errors in the alleged Harrison confessional film – there are people who will believe this wild tale about the Beatle dying in a fiery car crash, only to be replaced by a look-alike/sound-alike that has fooled everyone to this day.
But then, people from all walks of life are willing to spin the most ridiculous lies imaginable, and there will be gullible souls who buy their absurd statements without hesitation. This is particularly acute among those who insist that the housing market is poised for recovery.
Two weeks ago, when the Federal Housing Finance Agency's (FHFA) seasonally adjusted purchase-only house-price index registered its largest largest quarterly decline since the fourth quarter of 2008, the response from FHFA Acting Director Edward J. DeMarco was borderline absurd.
‘In many local real estate markets, particularly those hit hard by this cycle, foreclosures and other distressed properties are still a key factor in recorded and anticipated future sales and may be delaying price stability or recovery,’ DeMarco said. ‘Fortunately, serious-delinquency rates also are declining.’
Price stability? What price stability? As we reported last week on MortgageOrb, Standard & Poor's S&P/Case-Shiller Home Price Indices found the U.S. National Home Price Index declined by 4.2% in the first quarter, after having fallen 3.6% in the fourth quarter of 2010. The National Index hit a new recession low with the first quarter's data and posted an annual decline of 5.1% versus the first quarter of 2010. Many observers are calling this the start of a double-dip housing recession.
What about recovery? Today, the Joint Center for Housing Studies of Harvard University will issue its report ‘The State of the Nation's Housing’ – and everyone should read it, because it offers some of the most startling information you will discover in any housing-related publication.
‘While the sharp declines in both home prices and interest rates have left homes in many places more affordable than they have been in decades, says Eric S. Belsky, managing director of the Joint Center for Housing Studies, ‘stubbornly high unemployment and tightened lending standards have limited the ability of many first-time buyers to capitalize on the situation. The state of the nation's housing is sobering: Total housing construction over the previous decade now barely exceeds the lowest level of any 10-year period in records dating back to 1974, but vacancies remain elevated, because the recession has driven demand down so sharply.’
And having a house is not exactly a stress-free endeavor, especially when it comes to paying for a roof over one's head. ‘The State of the Nation's Housing’ found that 19.4 million households paid more than half of their income for housing – 9.3 million homeowners and 10.1 million renters. Households earning between $45,000 and $60,000 saw more than 30% of their incomes go toward housing, up 7.9 percentage points since 2001.
And should we be fortunate that serious delinquencies rates are declining, as DeMarco insists? Well, new data from Lender Processing Services found that delinquencies increased by 2.4% in April, although they are more than 25% lower than the peak seen in January 2010. But we are nowhere out the woods: Data released in March by RealtyTrac found that sales of bank-owned homes and those in some stage of foreclosure accounted for 28% of all U.S. residential sales in the first quarter.
Of course, not everyone believes that we are on the road to housing recovery. No less a figure than Treasury Secretary Timothy Geithner is refusing to drink that proverbial Kool-Aid.
‘We're sort of three or four years into the housing repair, you could say,’ Geithner said in a May 25 interview with Politico. ‘But we've got several more years to go. Again, just realistically, I think it's going to take time still to heal that.’
For someone with a history of evasiveness and obtuseness, I am glad that Geithner is finally admitting what is becoming all too obvious. Maybe you can play Beatles' songs backwards and use the noise to insist the real McCartney is dead and buried, but you can't play with the current data and insist the housing market is alive and thriving.
– Phil Hall, editor, Secondary Marketing Executive
(Photograph courtesy MVD Distribution)
