Numbers Don't Lie (but they may fib a little bit)

"Economix," a blog that appears on NYTimes.com, can be an interesting read for those curious about a more scientific approach to the national real estate market. Today's post by Harvard economist Edward Glaeser, looks at hard data for mortgage approval rates and loan-to-value ratios. The findings are inconclusive. In short, approval rates and LTV ratios were not significantly different during the real estate boom than they were in the years before. Statistical analysis, of course, is designed to take anecdotal observation out of the equation or even, as in this case, conventional wisdom. From a Realtor's perspective, this is a little like looking at a barometer to tell you when it's raining. Most of us would just walk outside and see if we got wet. Nevertheless, it's interesting to see that the data does not necessarily bear out what we might expect. The truth, as always, lies somewhere in the middle.

A previous entry in the blog tells us that housing prices peaked in May, 2006. This is a nationwide measure. Our considered, Marin-and-San-Francisco-centric opinion, is that our local markets first faltered in September, 2007. It would be reasonable that the boom in these areas would last longer than the nation's s a whole, due to more favorable economic factors and the relative lack of new construction. Why do we pick September, 2007? Because that was the month when we first heard about Jumbo mortgages failing to fund. This is a strictly anecdotal, but, we believe, entirely accurate conclusion.

We find it useful to compare local market observations and national market data to help inform our understanding of where we were, how we got there, and where we're going. If you are a Times or WSJ reader who tends to get caught up in national or even statewide statistics, remember there are always stories closer to home that may paint a different picture. And we're always happy to tell them.