Buy a House, Be a Contrarian (Yeah, Right!)

This morning on CNBC, 30 minutes after the Commerce Department reported single-family new home sales were down 3.9% in February versus January and down 18.3% compared to year ago levels, David Michonski (president/CEO of Coldwell Banker Hunt Kennedy) squared off against Dean Baker (Economist and co-director of CEPR) to discuss if now is a good time to buy a house. Could you guess who took which side?

While Dean Baker pointed towards the newly release sales numbers and the general psychology of buyers believing prices could go lower, Michonski was expectedly upbeat about the housing market. If fact, Michonski stated that the median price for a single-family home was up 1.1% in 2006, slightly lower than the historic 4%. He ventured that median prices were slightly down last year, but should return to the the historic 4% in 2007. He further followed the REIC mantra by saying it's hard to be a contrarian and buy a house now, and that now is a good time to buy a house and that a 6-month inventory is a balanced buyer and seller market. Even the host of CNBC asked Michonski if he is doing a disservice to his customers by saying that kind of thinking out there if the face of economic indicators and sales numbers that show housing weakness.

To Dean Baker's credit, he didn't get into a cat fight with Michonski. He pointed out that these are monthly numbers and can only suggest a trend, but he did nail Michonski for the median sale price rising 1.1% in 2006 comment as being disingenuous. Baker has read the tea leaves (indicators/numbers) and is not paid to selling homes as Michonski is.