Diana Olick is an Emmy Award-winning journalist, currently serving as CNBC's real estate correspondent as well as the author of the Realty Check section on CNBC.com. She also contributes her real estate expertise to NBC's "Today" and "NBC Nightly News with Brian Williams."
Prior to joining CNBC in 2002, Olick spent seven years as a correspondent for CBS News.
Olick began her career as a local news reporter at WABI-TV in Bangor, Maine; WZZM-TV in Grand Rapids, Mich.; and KIRO-TV in Seattle. She joined CBS in 1994 as a New York-based correspondent for the "CBS Evening News with Dan Rather" and "The Early Show." She also contributed pieces to "48 Hours" and "Sunday Morning." During that time, she covered such stories as the World Trade Center conspiracy trial and the Boston abortion clinic shooting.
In 1995, Olick was assigned to cover the Midwest as a Dallas bureau correspondent. In the three years she was there, she covered all forms of natural disaster, including the crash of TWA Flight 800, the JonBenet Ramsey murder mystery and was the exclusive correspondent for the trial of Oklahoma City bomber Terry Nichols. During that time, she also took a temporary assignment in CBS' Moscow bureau, where she chronicled the brief presidential campaign of Mikhail Gorbachev.
In 1998, Olick was reassigned to the New York bureau and then immediately posted to Bahrain for the buildup to a possible second Gulf War. A year later, she went to Albania to cover the U.S. military buildup during the conflict in Kosovo.
Upon her return, Olick was reassigned to CBS' Washington bureau and the Capitol Hill beat. During Campaign 2000, Olick covered the Senate campaign of First Lady Hillary Rodham Clinton and later joined the Bush campaign as a special correspondent for "The Early Show." That fall, she was named Supreme Court correspondent; her first case was Bush v. Gore.
Olick has a B.A. in comparative literature with a minor in soviet studies from Columbia College in New York and a master's degree in journalism from Northwestern's Medill School of Journalism.
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A few days ago I asked why the home builders didn’t see this downturn in the housing market coming. Apparently, the question struck a chord with a lot of you out in the realty trenches: Larry W. writes: As a builder myself, I'll admit that I had a very uneasy feeling - here in suburban Chicago - back in the summer of '05. Sales of the $300,000 homes were beginning to slide, and demand was evaporating in the summer heat. For ourselves, we decided to re-tool - to examine the market and go where our competition was not - into lower cost housing product. Our belief was that market demands were shifting, and that by going to a lower cost, more affordable product we would have see better opportunity in the years ahead.
Newsflash for all you buyers in the $100m+ range: Leonard M. Ross, an attorney-investor in Beverly Hills just put his pad up for sale, retail price, $165m. It’s William Randolph Hearst’s old place; you know, the pink stucco one shaped like an H. They used to call it “Beverly House.” Stats: six residences, 29 bedrooms, 3 pools, movie theater, disco, 6 acres north of Sunset Blvd.
Ok, so we all know that home prices are in the midst of a correction. After a 49% increase in the median price of a home from 2000 to 2005, well, something had to happen, right? But that doesn’t tell the whole story, because, yet again, that’s one of those big national numbers that really doesn’t mean anything to you and me and the price of our homes.
The July earnings forecasts are starting to roll in, and I don’t care what the temps are hitting this month, home builders have to be in a cold sweat. Today Meritage Homes reported preliminary sales, closings and backlog for the second quarter, and honey, it ain’t pretty. Sales down 37%, closings down 28% and backlog down 39% from a year ago. And if that weren’t bad enough, cancellations rose to 37% compared to 32% a year ago and 27% in the first quarter of this year (that was pre-subprime fury when everyone thought the market would take a quick bounce back).
What’s a big public builder to do when the quarterly earnings report reads like a Stephen King novel? Do what you can to survive. Over the last couple of weeks I’ve read bits and blurbs of builders changing their strategies in order to stay afloat in these tough housing times, and I’m not talking about giving away a BMW with the kitchen sink.
I hate to say this, because I grew up in Manhattan, but are the residents of this respectable urban enclave on crack?? I’m busy reporting these nasty numbers of double digit price dips in the major metropolitan markets of our great U.S. of A.--the LA’s, Miami’s and Washington, DC's--and then I get this report from the exalted bean-counters at Halstead Property of NYC.
A really interesting report out from Karen Weaver, et al, at Deutsche bank does a great job of showing how the national home price “decline” number means absolutely nothing to the greater housing market. It’s a number that all you bloggers out there claim we in the main stream media like to throw around to try to scare everyone, and let’s face it, it drives the hype. But this report shows how local large MSA’s are ground zero for price corrections thanks to a change in the profile of the subprime borrower.
I’m going round and round with the folks at the Federal Reserve about this new “guidance” they issued for subprime lenders. The guidance covers various “consumer protection principles,” including “approving loans based on the borrower’s ability to repay the loan according to its terms.” Another very important guideline concerns prepayment penalties.
I guess I’m beginning to sound like a broken record, but I have to ask it again: just how much can the big public home builders take? KB Home, which has lost nearly a quarter of its market value this year, reported a second quarter that could give a CEO nightmares. The company posted a net loss of $148.7 million, or $1.93 a share, compare that with a net income of $205.4 million just one tragic year ago. Housing revenues, that’s if you subtract some land sales, were down 41% from a year ago.
Speaking at a real estate conference in New York, the CEO of luxury homebuilder Toll Brothers, Robert Toll, said, “I see no reason to expect a change in confidence until probably April ’08, when the candidates will fairly well be settled for the presidential election and we’ll start to listen to speeches about how we’ll get better.”