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Monday, August 29, 2005

"Olympia market overvalued or just fine"

The Olympian is reporting on both sides of the story with their latest report: Studies disagree on real estate's future.

According to a study produced by National City Corp., a financial holding company based in Cleveland, Ohio, home prices in the Olympia market were overvalued by as much as 18 percent. But a separate study by The PMI Group Inc. of Walnut Creek, Calif., says the South Sound market is priced about right and faces little chance of a major correction in prices.
Sounds like a story we've heard before. One thing the Olympian doesn't do though is tell us a little more about who is behind each of these studies. Who is National City Corp? According to their website, they are:
... one of the nation's largest financial holding companies. ... Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management.
So, they're in the mortgage business, but they also seem to have a balanced banking diet. Not the most impartial observer, but better than many. What about the mysterious PMI Group Inc.?
...headquartered in Walnut Creek, California, is an international provider of credit enhancement products and lender services that promote homeownership and facilitate mortgage transactions in the capital markets. ... PMI is one of the largest private mortgage insurers in the United States...
Uh-huh. "Credit enhancement products." I think I can guess where they're coming from. More people buying homes they can't afford = more people buying private mortgage insurance = more profit in their pockets. What a shock that their study is the one that showed the price as being "about right" and in little danger of "a major correction."

(Rolf Boone, The Olympian, 08.28.2005)

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