The above title is from a quote attributed to Samuel Clemens, known to many as Mark Twain. I must admit I like much of Mr. Clemens good ole common sense, especially when it comes to statistics. We are bombarded daily with all sorts of numbers and we seem to take on blind faith these numbers without context.
I meet agents everyday who can tell me they just heard this report or that report. The panic over some looming shadow inventory. The Henny Penny that the sky is still falling they are so busy following the crowd and listening to this guru or that expert that they never critically look at any of this "data" that they regergitate on the public.
The shadow inventory of bank owned properties (REO) never appeared because it wasn't there. Many of those properties were already in our local MLS reflected as short sales. Yes there have been many short sales and REO properties that brought prices down but it never came in the wave that the experts said was coming. In Hillsbough County (Tampa) Florida our inventory is about late 2006 levels.
Now the statistic is how prices are falling and there is still more to come. I say that is largely based on very skewed data. Take out the very heavily discounted REO properties and it is not the drastic drop that everyone says it still happening. I recall reading that the average short sale is discounted about 27% or 28% it seems to hold true. The REO properties are priced drastically lower in most cases. Then when I start looking at my primary market area of Seminole Heights and Riverside Heights and I see the first rises in median and average home sale prices in 4 years in two relevant zip codes. No the ceiling is not rising but the floor is rising and the floor has to rise first.
In February 2011 in Hillsborough County over 45% of the properties went from "listed" to actually "sold" in less than 90 days according to our MLS.
*If you are shopping for an agent to list your home, that is something you might want to know.
*If you are looking a buying a home, that might just change what sort of offer you consider making on that home that you love.
Another statistic of use to both buyers and sellers is that in our local market, the average sale price is within 5% of the listing price at the time of contract. The key is "time of contract".
Taking a critical look at the data and statistic is much better than a crystal ball.
Rick Fifer, 813-758-7444
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