Misleading Media on the real stats on house prices (Seattle: sales, real estate market)

[irrational exuberance]

I dont know about you, but I always learned in Economics 101 that when supply increases, demand decreases, prices decrease!!!!. Although I see articles on the local papers about rising inventories and plummeting sales number compared to last year, they contradict themselves but saying house prices are steady or going up. When I look at my Index mutual fund we look at the rate of return over a whole year or some specified period. Meaning from Jan 1 XXXX - Dec 31 XXXX the rate of rtn is X amount. Yet on house stats they report that prices will go down in Sep, Oct, Nov, then go up in December by 100 dollars that constitutes a gainfor the year. I want to see how much a median house price was in on Jan 1 2007 then on December 31st 2007. I am quite sure that the real prices on houses have decreased everywhere in Washington, including the mighty Seattle. I think I seen the median house price in Seattle was $481k in 2006 and they report in 2008 for 2007 at $455k and they swing it as if the house prices have increased by using the this time last year or this month last year stats. I dont claim to be a real estate guru but I do know investing and economics, and economics tells us that that if you have increased supply and decreased demand, prices will go down. Since my first post, my wife and i have went back to neighborhoods we looked at in October 2007 and seen a couple houses sold but prices are down $30k+. Its all good news for my wife and I and interest rates keep decreasing but when I open the local newspaper I see the opposite being reported. Then when we go talk to agents I have to get into a debate on how things will/are not going to turn around in 1 year and first time homebuyers such as myself arent going to magically want to reignite a trend that was fueled by subprime loans for the last 2 years. Agan, economics tell us they prices will continue to decrease, and economical cycle tell us that a decline in the economy is going to be a recession. But that is another post I will put up later. One more thing, I dont like how the media always points to worse housing markets, If I am a person going into foreclosure in Washington I wouldnt care how the housing market in Florida or California is doing that wouldnt muster up any additional income for me but that is the way people like their news. I think its interesting that most people look to those doing worse for comfort when realistically, if your struggling your struggling, regardless of how people elsewhere in the US or the world for that matter are doing. I am also interested to see how the unemployment rate for Q1-2008. With Wamu losing boatloads I am curious to see how many thousands get laid off.

[mthomson]

I agree with you on one thing...media focuses on bad areas and passes that off as everywhere. The rest of your post you're wrong.
Here are the real numbers for where I work:
From Jan 1, '06- Dec 31, '06 median price range in Port Orchard was $262,900...in '07 it rose to $281,067.
In Tacoma '06 median sales price was $235,500, in '07 it rose to $245,000.
Gig Harbor did drop...from $450,000 in '06 to $448,000 in '07.
"Mighty" Seattle was $439,500 in '06, rose to $459,950 in '07.
Not hype, not twisted, actual numbers from homes that sold via the NWMLS.
Doesn't make sense with the law of supply and demand, I don't get it, but those are the numbers.

[Balco9]

I noticed in good area's where schools are elite and low crime. Area's where there are over development with cookis cutters will see resale's decline in price. My home has been on the market for about a year now. Very fustrating!!! Already dropped 60k off the price and looking to break even after 4 years. I have a nice older home with an acre, but the neighbor sold his 4 acres to a developer to subdivide into 18 lots trackhomes. So basically i will be surrounded by cookie cutters in no time. I will never buy a home in a bad school district and where there is no inventory left for development...

[irrational exuberance]

Originally Posted by mthomson

I agree with you on one thing...media focuses on bad areas and passes that off as everywhere. The rest of your post you're wrong.
Here are the real numbers for where I work:
From Jan 1, '06- Dec 31, '06 median price range in Port Orchard was $262,900...in '07 it rose to $281,067.
In Tacoma '06 median sales price was $235,500, in '07 it rose to $245,000.
Gig Harbor did drop...from $450,000 in '06 to $448,000 in '07.
"Mighty" Seattle was $439,500 in '06, rose to $459,950 in '07.
Not hype, not twisted, actual numbers from homes that sold via the NWMLS.
Doesn't make sense with the law of supply and demand, I don't get it, but those are the numbers.

I dont know how you look at your stats but I always wonder about credibility. I dont believe anything the NWMLS says let alone the national association of realtors. They have a vested interest in Real Estate and that is analagous to telling an investor dont buy an IPO because the we think the company is going to plummet.....see where I am going, I havent seen one accurate outlook or prediction of the real estate market from the NWMLS or the national association of realtors that has been accurate. Then show me one realtor, broker etc that has ever said now isnt a good time to buy. They make it up as they go and any stats from a struggling industry but that industry are cherry picked and over optimistic

[Balco9]

You won't find a realtor like that unless he/she was your good friend.
Realtors are in the business to sale and are very defensive when
things are talked down about the real estate market. I personally
believe there are way too many realtors and not enough good one's!!!!
I give it a 85/15 ratio bad realtors. don't get me wrong there are great realtors
out there.

[Ultrarunner]

The "Mean" selling price often does rise in a bad market because the home buyers that are least affected are the buyers buying expensive homes.

I agree, it is very confusing when you read a headline that the mean home sales prices continue to increase for a region.

To be meaningful, you also need to compare the number of sales for a given period.

I have no doubt that the Association of Realtors is correct in saying the the mean home prices continue to rise... which translates to... "Of the homes sold... the more expensive homes are outselling the lower priced homes...

[Balco9]

That is false advertisment for a reason to get more buyers to be optimistic about an area. Who wants to buy an home in a declining market besides flippers an developers.

[irrational exuberance]

I am looking at the stats right now and for Pierce county according to the NWMLS the
median price in 2007 was $275k as of Jan 23rd, 2008 but yet on January 7th another article stated that the price was 269950 which was .01% up from December 2006. On November the stats came out as house price is 262950. In June 2007 it was 281k. I cant find stats that show how much a house prices were on Jan 1 2007.

Another interesting stat that over 20% of Tacoma loans are subprime which is number 10 in the nation. Other cities are Las Vegas, Miami, Riverside etc.....all places plummeting right now

[irrational exuberance]

Originally Posted by Ultrarunner

The "Mean" selling price often does rise in a bad market because the homes buyers that are least affected are the buyers buying expensive homes.

I agree, it is very confusing when you read a headline that the mean home sales prices continue to increase for a region.

To be meaningful, you also need to compare the number of sales for a given period.

I have no doubt that the Association of Realtors is correct in saying the the mean home prices continue to rise... which translates to... "Of the homes sold... the more expensive homes are outselling the lower priced homes...

Good point, when my wife and I started looking we thought 2400 sqft was huge then we looked all the way up to 3100 sqft and we may make an offer on a 3000 sqft home in a couple months. If your going to live in the middle of no where why not live in a big house....But I do remember seeing an article talking about the sales of lowered price homes down and the higher priced homes are selling more. But than again 5 is more than 4 homes but whatever creates more optimism of buyers in the market

[LordBalfor]

Originally Posted by Balco9

You won't find a realtor like that unless he/she was your good friend.
Realtors are in the business to sale and are very defensive when
things are talked down about the real estate market. I personally
believe there are way too many realtors and not enough good one's!!!!
I give it a 85/15 ratio bad realtors. don't get me wrong there are great realtors out there.

One of the things I really liked about the real estate agent we used when looking for retirement property outside Tucson was the fact that once we'd settled on a property he deliberately did a 180 degree about-face and gave us a bunch of reasons for NOT buying the land. When we first started to work with him he'd "warned" us that he would try to talk us out of whatever we decided upon and sure enough when the time came he did just that - specifically to make sure we'd weighed all the pros and cons of the sale.

We LOVE the guy and have decided that we have an agent for life.

Ken