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31 Comments on Existing-Home Sales Up, But Not All It's Cracked Up To Be!
Thank you for a very insightful perspective. Statistics can mean whatevery you want them to mean. I feel there is a lot of "spin" going on re the housing market statistics. Politically the uptick is great and the stock market loves it -- but depending on the local area the headlines must be very confusing to buyers and sellers.
Many areas perhaps are seeing increased sales, reduction in inventory but at what loss of equity to the sellers who must sell by short sale or go into foreclosure.
I may have become very skeptical in my old age but I doubt things will be all dancing in the streets, wine and roses in any time next year for many areas. I think this recovery will take a while.
Sue of Robin and Sue
James,
Those reports hold true for our market. Our October numbers looked like the sellers have finally bottomed out. Let's hope that holds true. And for the buyers...well, Spring season is just around the corner, and we have definitely seen an increase in activity.
The best piece of all of this news, whether you are in housing or not, the sales, are a good indication, that consumer confidence is up. There can be nothing bad about that...peace in the land:)
We had more sales here in Ann Arbor in October too, but the sales prices was lower. Prices are driving the market. It is forcing sellers to lower and be more competitive.
Saturday's paper had front page headline's proclaiming we were up 26%(in last 4 months) !!! The articles last two paragraphs did say however our prices continue to slide !
James:
It's part of NAR's job to paint a Rosy picture of the housing market for the public. And, they usually manage to put a positive spin on it no matter what. However, the rate at which house prices have been dropping over the past few years is simply not Rosy, no matter what anyone says to the contrary.
Just out from Case-Shiller this morning, they are stating that overall home prices rose for the 4th straight month and citing this as a sign the recovery is continuing . . . one can hope.
The power of positive thinking can work and rub off onto others! Sell, sell, sell, buy, buy, buy. Warren Buffet is buying companies while prices are low and believes we have "neared bottom". Real estate, all time low prices, invest people!
Sue - You are correct that any data can be molded into information. It definitely comes down to your own local market in terms of the reality of the report.
Jane - It's fantastic to hear that your market is stabilizing. I wouldn't go so far as to say existing sales are a direct correlation to consumer confidence. Let's way to see how Black Friday turns out.
Missy - I have heard that the same sentiment from real estate professionals throughout the country. Sales up, prices down. Unfortunately, the seller only hears sales are up.
Michael - Headlines sell newspapers. By the way, you still get the newspaper? Oh vie! LOL
Claudette - I'm not here to criticize the NAR, but you are correct that as an association they definitely emphasize the positive aspects of every report.
Frank - Don't get me started on the inadequacies of the Case-Shiller report.
Jill - If I had billions of dollars at my disposal, I would be buying left and right. As-is, I am just a pawn in this big game of real estate trying to make my next move count.
Distressed sales - that is what we are looking at in our market.
We moved a lot of bank properties, good news for sure, yet we've got a lot more to come. Couple that with the homeowners who decided not to put their house on the market this fall and wait for the spring market thinking that prices will improve, and what do we get...? I see inventory rising on the horizon.
I don't think we are out of this yet.
It doesn't make sense to me to use a pending home index especially since so many of our pendings are short sales which can definitely skew things.
Dan - It has been stated by the likes of Diane Olick that distressed sales are artificially inflating the existing home sales as they have been processed twice since the beginning of the summer. Inventory levels will increase as a normal part of the real estate cycle in the spring. Make sure to keep an eye for the wave of foreclosures just over the horizon as well.
Christine - Pending Home Sales Index is a forward looking measure of the housing market and if you are accurate in your assessment, then future existing sales may continue to improve. The caveat is that the median sales price will continue to plummet. No one really likes the scenario much.
The entire misnomer that business is up is because of the artificial stimulation of the market with the tax credit. We won't know what our housing market really looks like until the artificial influences are ended.
Christianne - Artificial or not, the closed sales are real. Now it is a matter of how we can sustain the volume of transactions and get home values moving in an upward trend for sellers, buyers and existing home owners.
James - we always use GNIAR stats when doing our "state of real estate reports" for F.C.Tucker.
We've noticed over the years that rosy NAR data does not apply to NW Indiana - I'll be doing a post soon on YTD Residential Real Estate CLOSED 2008 vs 2009 Jan thru October and all 3 counties Lake, Porter & LaPorte are down in sales and price this year as compared to last - even with the 1st time home buyer incentive!
pendings mean nothing nowadays iwth the Havoc of HVCC :)
As always- great post
Sincerely,
Grace
Grace - As they say, real estate really is local. Glad to hear that you are leveraging local data to demystify the headlines.
James, NAR is doing its best to keep the public's confidence up and taking every opportunity to promote even a slim glimmer of hope.
Alters - I'm all for being positive. At times though I feel as if NAR is spinning the the headlines like the Obama administration tried to do last month about how many jobs have been saved through the stimulus money.
7% and 30%...that stops you in your tracks with a dose of reality. Thanks!
Cheryl - A dose of reality showcased properly can actually be a motivator. Use wisely.
HI James
I had a question and a comment. My comment is tha tI love your article and I hope you keep wriitng informative stuff. My question is tha tI work on a website that deals with commercial real estate in Indianapolis, In. Do you think that commercial office space in Indiana is gonna bounce back in relation to residential. The website I work from is www.officespaceheaven.com/indianapolis.html. Let me know your thoughts.
thanks
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