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Hot markets - can you trust the national media?

Graph supposedly showing current appreciation rates - but it is using data almost 6 months old OK. Don't get me wrong. The real estate market in Salt Lake is doing better than most places in the country.

I just want to point out to the person who isn't involved in real estate on a daily basis (i.e. the consumer) that the actual truth about the market is often slightly different than what you hear in the media.

In an age of instant messaging, blogs and fiber-optic data transmission, you would expect to be able to keep a pulse on something so large as the housing market.

In a recent Money Magazine article, Real Estate: Last of the red-hot markets printed on December 2 2007: 10:21 AM EST the consumer sees the graph to the right.

NOTICE that in the bottom of the graphic in light grey print you see the following disclaimer "Prices are for the year ended June 2007 except for Wilmington's, which is a September 2007 average."

So here you have an article that is going to print discussing "where the housing market still sizzles" using information that is almost six months old. They should have sought more recent data to give a more accurate picture of the current state of the housing market, or they should have titled the graph "Where the housing market was still sizzling six months ago."

I cannot speak for the rest of the markets mentioned, but what I can tell you is this: Prices in the Salt Lake Market Area are still rising, but appreciation rates surely have slowed to about 7-10% (in my estimation). I also expect the appreciation rate to continue to slow in 2008 to about 3-5%.

There are enough compensating factors in our local economy that could keep the appreciation rate from dropping to that level in 2008, but only time will tell as the Buyers begin to come out of hibernation this Spring.

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(Now it's time for MY disclaimer: even though the data is old, those markets could still have been the best markets in the country in December, but it would have been nice to have data to support that the information was still correct.)

Posted by Benjamin Clark - Exclusive BUYER'S AGENT - Certified Negotiation Expert - SLC, UT on 01/09/2008 10:49 AM

Comments (6)

appreciation, market, salt lake, rate, media, report, eba, exclusive buyers agent

Originally posted at: Buying a Home in Salt Lake City, UT: Hot markets - can you trust the national media?

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6 Comments on Hot markets - can you trust the national media?

JAN

2008

This seems fairly typical of the media. Makes me wonder what others things I have believed over the years that aren't really that acurate.

Ben - I will testify that Washington State's real estate market is still strong. I work 90 miles north of Seattle and most of our relocation buyers come from the Seattle market. Our market increased 3.2% last year.

So true, Ben. Like Krista, I have often wondered what falacies I took as truth also. In this age of instant information available, why can the drive-by media not get it straight?

This article is just one example. They aren't the only ones that are using old data in stories as if they reflect the current reality. I could tell you what my calculations suggest for our market, but the truth is that my calculations are made with MLS data and there are other home sales that take place off-MLS. The consumer has to look at MLS data, OFHEO's report, and also they must somehow get a feel for the "attitude" of the marketplace.

Many Buyers have been playing a wait-and-see game, and even our marketplace has been affected by the sub-prime mortgage crisis. Almost none of my clients have been directly affected, but it does affect the total number of properties that sell in the marketplace (fewer Buyers), which affects inventory levels (more inventory), which affects the Buyer's choices (more choices), which affects Seller's who have to more aggressively compete for those Buyers, etc. etc.

Benjamin...

Don't get me wrong here...

I enjoyed the post but really really want to respond to the question.

Who in their right mind places trust in the media nowadays?

I mean please...If it's not negative...They don't tell us about it :)

TLW...ROAR!

Even so, there are many of us who hope we can support our views and opinions with something that is printed by the traditional media. You have no idea how many agents are out there telling their clients that home prices in Salt Lake are still appreciating in the 16-20% range and how hot our market is.

True, even at 7-10% appreciation (Shoot, even at 5-7%) we are still one of the better markets in the country, but the inventory is growing, the total number of homes sold in each quarter is declining, many agents who got involved in real estate during the boom are looking around wondering where they will get business (and/or if their listing will ever sell).

Positive Appreciation is great for those of us who own homes, and for those who are considering making a home purchase. It means the money they invest, as well as the total value of their investment is currently growing at a rate of x%. The higher that number, the more money homeowners are earning on their investment.

Although rising prices is 100% good for the home owners, it doesn't necessarily mean that the real estate market as a whole is "sizzling" or that it is still "booming" as the media likes to portray it. Try telling that to the 66% of home sellers whose homes did NOT sell in the 3rd quarter of 2007 (or to their agents!).

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What does the graphic say?