Sounds like typical media reporting to me... report the part of the news that scares the hell out of people... disregard the whole picture.  I don't know anyone that would turn down a 72.54% return on their investment. 

Simon - This is what my wife likes to call "How to Lie Using Statistics".  Thanks for pointing it out.

Jesse and Kathy - Thanks for stopping by and for your comments. Seems like a pretty good return to me also.

Simon,

What the media looking to sell their piece of the business....tell me it isn't so.

Again we have to be the voice of reason for our profession in order to survive.

Have a Great New Year.

Jason - I just find it simply amazing.

Dan - I believe it is up to us to make sure the full truth about our industry and our individual markets gets to the public. Thanks for your comments.

Simon - I have an upcoming post our Bradenton - Sarasota market on this very subject.  Thanks for the good work.

Nice to see you Dan - I was going to call you when I saw Sarasota in there, but I didn't have time. Crazy day yesterday. ANyway, I didn't dig deeper than the obvious on this story, but last I heard Sarasota was actually showing signs of recovery. I look forward to your blog later.

Simon- WOW! This is a great post, you explained it so simply! Thanks for this arming post. We gather our ammunition in a folder for those situations where the person is thinking the media is all that! Katerina

Glad to be of service Katerina

AWESOME, Simon....... that is so like short sighted people...they just look at what SEEMS to be bad and then go and shout to everyone who will listen that what THEY SEE is how it is....

No wonder only a handful of people made it into the promised land.....

Too many others listened to them and believed the crap they told everyone..

;-)

Interesting analogy Alexander - and very true.

Simon, Median price is very decieving. In my area there is alot of new construction going on which drives up the median price. As far as existing homes you would have to be in your home over three years to get the same price you paid for it. At five years  you may be looking at 10 to 20% gain tops.

Homes that sold 2 years ago in my county now start being listed at 15 to 20% less.

Hugh - it just depends where you are. The important thing I was trying to point out here is that there is good news out there if you know where to look.

Simnon, that is good info!  Thanks for keeping it all in perspective for us!

Happy New Year from Idaho!

Happy New Year to you too Don. Thanks for your comments.

Simon - I work in the Merced area.  (The population figure is for the entire county of Merced not just the city of Merced)  The city of Merced is the home of the newest campus for the University of California system. It has been open about 2 1/2 years now.  When the university was under construction I got calls weekly from people that wanted to buy property in Merced, most from the SF Bay Area.  By the time the University opened the buyers frenzy was in full swing.  The student population is expected to be around 20,000 when it is fully built out, IN 20 YEARS! Currently there are less than 2000 students and a good percentage of those live on campus or already lived in the area.  I read a statistic about a year ago that just over half of the single family homes in Merced were non-owner occupied (investors).  So with all those investors having bought hoping to rent out the homes to students that are not here yet we have seen a lot of foreclosures. So yes home values have gone down and foreclosures have gone up the last 2 years. (prices are now back to 2005 levels)

On the other hand if you bought a home in Merced in 2002 (five years ago) you are absolutely way ahead. Of course this is not reported on in todays media. Sensationalism sells papers.   

Unfortunately it seems like in the last couple of years people bought homes thinking that they were going to make tons of money. After all they were reading in the papers and hearing on the news how home values were going up by thousands of dollars every month.  I guess they didn't stop to think about how historically home values rose maybe 3-5% a year not 25-30% a year.  Hopefully now people will start to understand that buying a home is first a place to live and second not a short term investment.

Just a bit of rambling from me.  Have a great New Year!

Thanks Jim. The thing is of course that buying a home is always a good financial investment - as long as you are buying it to be a home that you will live in. SHort term speculation will also make you money if you know what you are doing and time it right.