Realty Viewpoint: Watch The Dates Of Housing Reports

by Blanche Evans

It didn't take long for the bloom to leave the rose. The notoriously pessimistic backward-looking S&P Case-Shiller Index says housing prices fell a record 2.4 percent between December and January and 10.7 percent for the year. Following on the heels of the February report from the National Association of Realtors, the Case-Shiller report appears to contradict the NAR's findings that home sales went up 2.9 percent and home prices fell 8.2 percent over the past year.

Well, there's a reason for that. The two reports don't cover the same period, the same markets, or the same types of housing. The NAR's report covered February, not January, and it includes all market areas where there's a Realtor reporting sales, and it includes multifamily housing such as condos and coops.

So to say the NAR's report is a little more relevant is an understatement.

So you have to be careful what you read and what you pay attention to.

But that didn't stop the financial press from fueling more housing panic.

CBS Marketwatch used this headline - "Housing Prices Fall At Record Rate" to tell this story: "Home prices in 20 major U.S. metro areas have plunged a record 10.7 percent in the past year as prices continued to decelerate, Standard & Poor's said Tuesday."

CNNMoney.com used this headline: "Home prices: Down record 11 percent - The residential real estate market continues to deteriorate in 2008, with 20 key markets reporting steep drops."

Gee, is this happening right now? No, it happened two months ago, to only 20 markets, and to only same-sale homes.

The only comparable report to the Case-Shiller Index is OFHEO's ( the Office of Federal Housing Enterprise Oversight) and it showed only a 3 percent decline in prices for the past year.

There's a reason for that -- OFHEO doesn't include nonconforming mortgages. Just to recap, it's jumbo and subprime loans that have been the most volatile.

No wonder Consumer Confidence is in the dumpster. People don't know what to believe, so they believe the worst.

The Conference Board just reported the lowest consumer view of expectations in 35 years.

"Looking ahead, consumers' outlook for business conditions, the job market and their income prospects is quite pessimistic and suggests further weakening may be on the horizon," said Lynn Franco, director of consumer research.

While consumer confidence is tracked through March, it's still only a short-term forward-looking indicator, and not a credible one at that. Consumers in March were slammed by a plummeting stock market, and many watched their 401k's all but disappear. No wonder they're pessimistic.

They'll pull back on spending, and then prices will come down, and then they'll start spending again, and the whole cycle will start all over.


Published: March 26, 2008 http://realtytimes.com/rtpages/20080326_realtyviewpoint.htm

A Brighter Note for Housing

While the Grinch may have had his way with housing this past year, better days are ahead. NAR Chief Economist Lawrence Yun tells us that the economy and housing will easily escape recession, but foreclosure rates will continue to rise in 2008. Some markets will do better than others, however on the whole, the national home sales and price situation will be very similar in 2008 to 2007.

Click here for full article.



"Copyright National Association of REALTORS®, Reprinted with permission."

It Works Both Ways!

In slower housing markets, most sellers understand that attracting buyers becomes more of a challenge. With more homes for sale at ever more competitive prices, buyers tend to have more power to choose and negotiate under these circumstances.

What steps can you take to insure a faster sale at a higher price? First, seek representation. Over the last ten years, the number of homes that sold "by owner" fell by one third, and that statistic includes all markets, both hot and cool. What does that trend mean? Sellers have come to realize that real estate professionals are better equipped to produce top dollar offers, especially in slower conditions.

In 2006, the National Association of REALTORS® reported that the median selling price for homes listed through agents was 16% higher than those homes that were sold "by owner." Beyond putting more money in your pocket, an agent also saves you untold headaches associated with marketing your home, orchestrating showings, and coordinating paperwork.

Last year, a significant number of unrepresented sellers ended up finally turning to a professional. Why wait until your home has already become stale inventory to reach the same conclusion? Remember that what works in a slow market also holds true in very active markets - a professional representative simply brings more knowledge and experience to the table, resulting in higher offers in less time.