Category: John Dixon Associates News
Posted: 4/17/2012
Mixed signals aren't necessarily a bad thing
By John Dixon
Sometimes I think we'd all get a clearer picture of what's happening in the economy -- and the real estate market -- if we refused to read the financial news more than once a week.

Actually, once a month would be better still, but I doubt any of us could handle that. 

The problem with staying "on top of things" is that we see all the ripples and lose track of the waves that really matter. 

Today's headline, for example, is that housing starts are down in March -- 5.8 percent below February, as if that means anything. (Compared to March of 2011, housing starts were up 10.3 percent.) 

The numbers -- reported by the Census Bureau -- serve a very important purpose, of course: They give financial reporters something to write about. That keeps the news sites humming, but it doesn't necessarily give us much perspective. Other bits tell us that mortgage rates are back down to record lows. That sounds good, until you remember that a low rate is useless if nobody has the money to lend, and money continues to be tight.
Another ripple: Rents are going up while home prices remain stuck in the mud. This passes for bad news, and it is for people who can't get a mortgage. But it's a plus for the real estate investor, because it indicates he can add homes to his portfolio at a lower price but rent out at higher rates for more income.
As always, the devil is in the details, but the clarity is often in the lack of them. 
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