The other day, as I was reading through my RSS reader feeds, I really got a good laugh. No less than four posts in a row with headlines like "Home Prices remain steady" "Housing values continue to fall" "Home prices are up for the 3rd month in a row"
I guess that they wanted to pretty much cover all their bases. As comical as it was to see them laid out back to back, it's not a laughing matter if you're looking to buy or trying to sell. It becomes very frustrating. Keep in mind, these weren't articles written months apart. These were all written on the SAME DAY!
So, how did each writer come to so very different conclusions and how can you figure out what's really going on?
In short, it's the data they used. That's why it's important to read more than just a headline and to determine where the data they are using came. In truth, every headline above could be completely truthful. One could be talking about the "national" housing market while another could be referring to the state level housing market. There may be dramatic changes even from city to the next in a local real estate market.
Here's a quick example of how each could be true and how sometimes, lumping things together doesn't always show the real picture.
We have three houses. House #1 is $300,000 House #2 is $200,000 and House #3 is $100,000. The average price is $200,000.
Now, House #1 drops in value 50% to $150,000 House #2 value remains unchanged at $200,000 and House #3 value goes up 10% to $110,000. The average price is $153,000 and some change, put to keep it simple we'll round down to $150,000.
So, using those numbers, the houses had a combined loss of 25% off their original average market price. That's horrible! Yet, House #2 is still okay and House #3 is pretty happy.
That's exactly why if you read something about California real estate has dropped 50%, it doesn't mean much in Hickory, NC. It's important to understand what's going on in YOUR REAL ESTATE MARKET.
The best way to do that is to contact your local, professional REALTOR® and have them help guide you through the headline mania and get to the real truth for your area.
yes yes,,yes...all the news you hear is always looking at the big picture and those numbers are usually very decieving, when you break it down by region ...by state,,,by location/neighborhood, then you really start to see the true state of your market ....
I try to remind people that the overall markets are up but that micro-markets can and do trend down. The reasons for those declines can vary but it's always a simple supply/demand situation. In this area, Los Altos specifically, we're considered the entry-level high-end market. Prices were up about 2% last year. However, when you do a price range survey within the Los Altos market the prices at the top end (homes over 3M) are taking big hits. Homes near the median are selling like crazy.
What the media don't report is that there are markets that are up. The don't actually go into any depth. It's because of that we hear generalizations. At the end of the day, all they want to do is sell papers and bad news sells.
Unfortunately, the 'Big Picture' doesn't help the local buyers and sellers much, does it, Carlos
Bryan, I think that covers it...bad news sells.
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