CNBC's Real Estate News is Worse than Jim Cramer

The only people who have both been consistently wrong and still have their job are politicians and Jim Cramer of MSNBC. And Jim Cramer's advice is not nearly as bad as their real estate news, which is consistently bad.

But, before we get into that, let's do a quick update on the market. Well, as always, let's start with the data.

Mortgage rates were a wild ride this week, moving above the 7% mark early in the week, then dropping 0.25% back to 6.75% as the market was concerned about banks and other investments.

Inventory: nationally, housing stock continues at record lows for periods other than during the Pandemic, and has declined to match the rates of 2021. As I have repeatedly said, as long as inventory is low prices cannot go down much.

Locally, in Los Angeles, the market continues to be a seller's market, holding at a market action index of 41, slightly more of a seller's market rating than last month's 40.

A lot of media has been focusing on the markets that were hottest during the pandemic, such as Las Vegas. But even there, the market is balancing out with a current rating of 38, up from 35. The controlling factor there is the inventory declining to match the market demand.

Where is the market headed? Well, everyone has an opinion, it just seems that no one really has any idea. Here is a great post from Lance Lambert of Fortune magazine basically sharing two leading sources of real estate data, one predicting home prices bottom out, and one seeing a sharp price correction ahead. Hat tip to Jill Spady!

So, all he is doing is collecting opinions and sharing them, with no analysis. Nothing but just quoting these companies selling their data.

The core factor keeping prices from falling too far as well as keeping prices high, as I have said regularly, is the lack of homes. Here is a great analysis from Mansion Global (hat tip to probate attorney David Schechet!) that quantifies the shortage nationally as 6.5 million homes, which is more than the annual sales of approximately 5 million.

Never one to miss a chance to write an article that is meaningless because they have to fill their website, Redfin chimed in this week with an article telling us that monthly payments have hit all-time highs.

Of course, almost everything in life costs more than ever. Movie tickets go up every year, and the cost of a cup of coffee goes up every year. Our economy has averaged inflation of 2-3% annually, so mathematically of course EVERYTHING goes up in price every year over time, so why would not housing payments? How is this news? Do we really expect housing payments to go down? Or if they ever go down, would it be a great time to buy?

The winner this week for misleading information is CNBC. This is the network that has stock "expert" Jim Cramer. In case you don't remember him or never heard of him, here he is telling investors to hold Bear Stearns days before they collapsed and investors were wiped out.

Their typical poor advice is to focus consumers on a FICO score. Here is a recent article 

Their advice is to check your credit score with 3 companies. Conveniently, those companies are advertisers. Worse, how about telling people to pay off their debt before buying a home, and then pay their bills on time? If you do that, you will have a sufficient credit score to buy a home. Yet, CNBC wants you to purchase some stupid notification service from an advertiser so you can juggle your accounts or open new accounts with other advertisers.

First, I love the scared face. Nothing says serious business reporting like a woman in a coat outdoors looking scared. Also, notice the title: the housing market is in "big trouble." What does that mean? The report does not show that we'll get to the details, but big trouble would mean housing prices drop, but wouldn't that be good for buyers? Then she reports she went to 1 open house and there were only 2 buyers. OK, 1 open house does not make a survey, but that's not uncommon. Some homes are vacant and get held open every weekend, and getting 1 or 2 a week is what it takes to sell it. I get it is fun when there is a crowd, but that is not how it works, and she went to 1?
Finally, she reports that inventory in Las Vegas is up 200% over a year ago, but still below pre-pandemic levels. OK, so the market is still tighter than normal? And she says prices went up last month as a result.

This is so confusing and worthless.  But they got 164,000 viewers in the last 2 days to watch THAT.
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Bill Gross, The LAProbate Expert
I am a real estate broker in Los Angeles, CA focused on probate real estate and the leader of a team of over 1,100 agents nationally probate experts.

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