Housing Prices Declining? A Redfin Agenda?

We got a nice mention recently on Jon Lansner’s blog in the Orange County Register. It had to do with the post that I wrote about housing prices in Irvine’s Oak Creek area and my opinion that prices would continue to decline in Orange County. One commenter on Lansner’s blog questioned the claim that OC housing prices were still declining. The same commenter claimed that Redfin bloggers had an agenda. Here is my reply:

The first thing that I want to say is that this is a topic that involves people’s money, so emotions are bound to run high. My intention for the Redfin blog is to provide accurate information that will help readers make the best choices for themselves; however, I am always willing to hear opposing ideas. In fact, I encourage it.

Concerning housing prices going up, down, or staying flat, I’m following the numbers on this one, and here are some recent numbers on this: PMI Mortgage Insurance Co. says that Orange County has an 81% chance of home prices falling within the next two years. That gives us a ranking of the sixth-riskiest area for a housing price drop of the top 50 U.S. metro areas. For a while last year, PMI rated Orange County as the third riskiest. So according to these statistics, we are improving, but it still doesn’t look good. (Jeff Collins, “County descends list of markets most likely to see cheaper homes,” Orange County Register, April 11, 2008)

There are other numbers out there that would back up the declining Orange County housing prices claim, and perhaps that is a topic for another time. For now, I will just say that PMI has no vested interest in seeing housing prices decline; the company just has an interest in getting it right. Their business depends on it.

The benefit of getting it right, even if the answer is not the one that you would like it to be, is also true for individuals. My take is that it is better to look at the situation as it is rather than as you would like it to be. This way, even if the trend isn’t to your liking, you will be in the best position to protect your assets and interests. (For an example of what I am talking about, see “The Story of Pitcairn Drive, or the Necessity of Price Reductions.”)

Concerning what Redfin expects from its bloggers, here is how a Redfin exec put it to us about a month ago: Your goal should not be to sell houses. If you think that home shoppers should buy, then tell them to buy; if you think that they should not buy, tell them don’t buy.

So you see, no agenda. All bloggers are free to write their true opinions and observations. And we do! However, I am always ready to read any contradictory information. Who knows: Maybe, if your facts are compelling enough, I’ll change my mind.