Regular readers know that I keep tabs on a number of local journalists that I’ve tagged as being industry cheerleaders. These journalists routinely write puff-pieces praising real estate and urging people to buy without regard to caution. One of these cheerleaders is journalist Warren Boroson.
Here is his most current piece:
Author: Home prices set to fall
There I was, bopping through the aisles at a Barnes & Noble, when what do I see?
A book called “SELL NOW! The End of the Housing Bubble.”
The publisher is a respected name, St. Martin’s Press. Copyright 2006.
So I bought it. And read it.
A strange book.
The author predicts that house prices will fall off the table, returning to their 1997 levels. All over the developed world.
Houses in New York and northern New Jersey will lose 44.6 percent of their value, falling from an average of $454,522 (in 2005) to $252,028 during the next five to seven years.
Anyway, my response is that people pay a lot of money for houses because houses are nice. You become the king of your castle; by paying down your mortgage, you own more and more of that castle — instead of making your landlord richer.
Yes, it’s clear that house prices in some areas are softening now. And maybe some people would be better off selling. But what a hassle!
And he may turn out to be totally correct, although I doubt it.
But if he’s right, he will have made a self-fulfilling prophecy. If everyone who reads his book does what he advocates, the real-estate market will indeed be in serious trouble.
Now, after you’ve read the article (or the highlights I’ve posted here). Take a look at this piece:
Is it time to cash in on your home?
Who else might want to seize the opportunity to take profits? Anyone with more house than they really need. Warren and Rebecca Boroson bought their Glen Rock, N.J., home 29 years ago for $69,900 and raised their two sons there. But now, says Warren, “our children are grown and out of the house. We had four bedrooms, which is three more to mess up than we needed.” Last year the Borosons sold for $579,000 and moved to a high-rise apartment in Hackensack, N.J., with a doorman and a swimming pool. [a rental]
“We sold mainly to lock in the profit,” Warren says. “It was a little faster than we’d planned. But if you’re planning to sell in a few years, you might as well do it now while you’re sure the market is still good.”
Warren writes a financial column for the Morris County, N.J., Daily Record that is syndicated nationwide. With an eye on retirement (he’s 69), he invested his cashed-out home equity in a laddered portfolio of bonds.
I have a bit of concern with one small piece of the article, I’m not sure if it’s just the way I’m reading it, but it comes off as a slam against the book’s author, John Talbot.
By the way, the author is someone named John R. Talbott. He is identified on the book’s back cover as a best-selling author (he wrote another book, called “The Coming Crash in the Housing Market”), was a visiting scholar at UCLA’s School of Management and was an investment banker at Goldman Sachs.
Whether he has any real-estate experience, whether he graduated from college and whether he has any advanced degrees is not disclosed.
This really seems like a below-the-belt slam against Mr. Talbot. A quick search on the web finds the following bios:
John R. Talbott is an economic consultant who has authored academic papers on economic growth and development and made presentations on the subject to the governments of Russia, Jordan, and Qatar. A visiting scholar at the Anderson School at UCLA, Talbott is also a former vice president in the investment banking division of Goldman, Sachs, and Company.
Here are two of John Talbot’s academic papers:
The End of Class Warfare: An Examiniation of Income Disparity
Political and Economic Freedoms and Prosperity
Not sure why a journalist would make such a rash assumption about someone’s education and background and not just do a little leg work to find the real facts. I suppose that if you can’t argue the facts, resorting to insult is the next best thing…
It would be very unusual for a Goldman Sachs VP to not have at least a bachelors from an elite school, and quite possibly an MBA from an elite school. It would also be very unsual for a visiting scholar at a top business school like UCLA to not have at least a masters, possibly even a Phd.
Consumer Prices in U.S. Increased 0.7% Last Month
Prices paid by U.S. consumers rose in January by the most in four months, a sign companies are having more success passing along rising costs to their customers.
Economists expected a 0.5 percent increase in the consumer price index, based on the median of 68 forecasts in a Bloomberg News survey. Forecasts ranged from increases of 0.2 percent to 0.6 percent. Core prices were forecast to rise 0.2 percent.
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“By the way, the author is someone named John R. Talbott. He is identified on the book’s back cover as a best-selling author (he wrote another book, called “The Coming Crash in the Housing Market”), was a visiting scholar at UCLA’s School of Management and was an investment banker at Goldman Sachs.”
Is that the famous Anderson School that has nailed the bubble in tech stocks in 1999 and more recently the housing bubble in 2005? I think the author has way more street-cred than Warren Bozo-son
Unrelated, but can you sue a realtor for misrepresentation?
On the coldwellbanker website the same house is listed 3 different times (zip code 07401). Twice for $769 and once for $549. The feature photo on each listing is the same, showing the front of the house. The interior photos on the $549 listing are different. I would love to walk into the office and put a bid on the house for $549 and when they tell me its not available tell them they’re going to be sued for false advertising.
“On the coldwellbanker website the same house is listed 3 different times (zip code 07401).”
Do you have the 3 links?
Could be a glitch, and I believe every listing from every realtor says the following: “information deemed accurate but not guaranteed.”
Here;s the one for $549
Never attribute to malice that which can be adequately explained by error.
Its also listed on the GSMLS for $549
But I don’t think it was just an error… I think it was intentionally done to pull more potential customers in.
“But I don’t think it was just an error… I think it was intentionally done to pull more potential customers in.”
Could be, I’ve recently seen Burgdorff change the zip code (MLS 2244112) after a crappy house sat without selling in the ‘expensive’ zip code where the house actually exists.
Those listings are both on the same street but have different house numbers. Seems like a mixup with the pictures.
I continue to pictures of my living room from the house I sold last summer on the Coldwell Banker website. It was a great Living Room!
Warren Boroson should be careful who he criticizes. I doubt that his background could survive much scrutiny, should anyone be interested in looking into it.
Is it just me or does it seem like there is a war of words going on now. This book. Lereah’s new book (or old book with a new title, I dunno, I’m not spending money on it), mainstream media articles. This market is hanging in the balance and the balance depends on public perception.
Marin Real Estate Bubble
It would be great if some of you eloquent and educated types would write some letters to the editor about this buffoon.
The Talbot book is interesting. I dug deeper on the book itself and Talbot does admit that he’s let his anger influence the writing. I got this off of Amazon’s summary of the book:
“As a guide for the average homeowner, this book is a convincing argument broken down into laymen’s terms, albeit one fueled by bias: Talbott admits he, “allowed his anger and bitterness,” to influence his writing, making it less a studied survey than a “creative analysis,” as Talbott terms it”
I guess you can’t fault him, many of us have the same anger or frustration. I would prefer the more studied approach though.
Yes, I guess Warren can make opinions on other people’s books. Especially when he’s written about:
Warren has written about:
* Why blondes have more fun (light reflected from blonde hair shrinks the pupils, so observers see fewer facial imperfections)
* the etiquette of dueling
* the only signer of the Declaration of Independence who later swore loyalty to the British
* what psychoanalysts have said about Mickey Mouse (his androgynous persona doesn’t threaten males or females)
* copyeditors from hell
* the best puns ever created
* the next nuclear war (a Delphi poll concluded: India vs. Pakistan)
* how he fell into the Jordan River
* the nasty card game called “Knuckles,” which children once played
* a defense of Typhoid Mary
* social effects of first contact with aliens
* the social significance of graffiti
* why you cannot tax-deduct casualty losses caused by termites
* why people won’t believe that Oswald did it alone.
Direct from his http://www.warrenboroson.com website.
Lovely, just lovely..
I predicted today (among a few co-workers) that prices in my area will correct to 2001 levels – particularly for the older, smaller, “starter” homes. I was met with laughter and mocking saying, “No WAY! They might drop a little bit, but there’s no way they’ll go back that low! Ha ha ha!” I said we’d have this conversation again at the bottom of the cycle and see who’s right.
Is it absurd for me to think 2001 prices are about right for a correction? It’s not as gloomy a forecast as Talbott’s 1997 predcition (though I sure like his better!).
This guy is a clown. He acts if he is some smart financial writer but he invests in laddered treasuries. What a loser!
Am I missing something. Borson does not think there is a bubble yet sells his house at the very peak of the market. Hmm.
does anyone listen to this guy?
What a joke. Boroson flatly denies a bubble, yet pukes his own house. I love it! What a complete and total joker.