Year Over Year Decline in House Values – What the TelePrompter Isn’t Telling the Pundits to Say

By
Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

The TV news shows are abuzz with how house values have gone down relative to same month prices from last year. “Economists are puzzled,” they say.

Maybe they should ask a Realtor! Remember the $8,000 tax credit that propped up values last year? Realtors remember. Realtors run comparable market analyses all the time for clients and know that there was a mini buying frenzy in spring 2010. In the first 2 quarters of 2010 buyers rushed to buy houses to get $8,000 cash back from the government.

What Has Changed?

  • In 2011 that incentive does not exist. It did in 2010.
  • Did sales precipitously drop right after the $8,000 giveaway expired, proving the brief mini-stabilization of 2010 was artificial? Yes.
  • Should that factor into the Year-Over-Year analysis? I would think so.
  • Is this the only factor? No.
  • Should it be considered? Yes.

They Have Whiz Bang Technology - They Must Know It All

Pundits stand in their studio with holograms and charts that hang in mid air. With a touch of a finger they make graphs spin around like genies escaping from thousand-year-old lamps. Everyone is mesmerized by the Star Trek technology. Wow, the pundits must really know what they’re talking about.

Oh, but did they factor in the $8,000 tax credit that expired in 2010? Did they mention it? Do they understand its impact on pricing? Do they even know about it? Realtors do. Hey give us a call; we may be able to give you a report from the front lines.

Maybe the tax credit issue is too complicated to get across in their 60 second sound bite.

Posted by

 

 

Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East

Website David.DavidHalpernRealtor.com

(502) 664-7827

 

 

View Dave Halpern's profile on LinkedIndave_halpern twitterhalperndave_facebookDave Halpern QR CodeLouisville Foreclosure Realtors Dave Halpern

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Selling
Groups:
The Lounge at Active Rain
The Ninety-ninth Percentile
"Whacked"!!!
Voice of Reason
Bananatude
Tags:
realtors
house values
dh
8000 tax credit

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
522,122
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

I have only one question about the stats.  Other than Case and Shiller, who cares?  Perhaps the builders need the data to plan the number of units to buiild next month, next year can use the data.  Individual consumers learn nothing from market reports that can help them decide whether to buy or sell real estate.

Then the other issue.  Other than being incomplete, inaccurate, and irrelevant,  the reported housing data seems flawless :))

May 31, 2011 06:49 AM #1
Rainmaker
291,436
Rebekah Radice
Imagine WOW! Digital Marketing Agency - Burbank, CA
Social Media Marketing, Coaching & Training

Excellent points.  And you didn't even need your teleprompter!  Thanks for posting Dave.

May 31, 2011 09:24 AM #2
Ambassador
1,951,782
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Another superb post Dave!

May 31, 2011 09:29 AM #3
Rainer
30,660
Joshua Vensel
VENVISIO - Real Estate Photography - Atlanta, GA - Marietta, GA

Great post, Dave.  Everytime I turn on the news, the sky is falling (which is why I now specifically turn off the news).  

May 31, 2011 10:03 AM #4
Rainmaker
716,233
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

This is a very important point.   Our area is pretty high end.  So you can see what the tax credit did or didn't do.   At the upper end of the market  - it did very little.  In that part of the market,  prices have actually gone up and sales are stronger this year.  High end buyers thinking they could make a killing on a $1 million + home and get it at a deep discount were bitterly disappointed.  There were plenty of reasonable buyers out there that were willing to pay what the comps indicated.

Its at the entry level where the market has suffered and the immediate move-up markets.  Entry level buyers were more sensitive to the tax credit and move up buyers had trouble selling their homes when the give-back dried up. Those markets are only now picking up steam and appear to have declined just enough to compensate for the $8000.  Actually, people buying this year are BETTER OFF because interest rates are great. But now we seem to be at or near bottom -with very little downward pressure at all. So buyers have to get with the program and make reasonable offers.

May 31, 2011 10:10 AM #5
Rainmaker
192,049
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

They are not going to reach out and touch someone. They might have an assistant call the NAR headquarters and get some nice sounding BS from those bandits. But, someone in the trenches trying to make a living? Fat Chance.

Oh, dear. You might have been a supporter of that tax credit. Oh, well! Opinions are like...................

May 31, 2011 11:19 AM #6
Rainer
300,904
Lehel Szucs
All Seasons Real Estate, Inc. - Covina, CA
REALTOR of choice

You are right on.  The truth is not sexy and rarely gets reported, uless it is bad.  

Back in February we hit a second bottom of the market and the news is just now pickingit up.  And the banks are still not admitting it.  Well, maybe Wells Fargo with thier recetn announcement that the market may not bottom out unitl sometime next year.

Good post.........

May 31, 2011 12:36 PM #7
Rainer
13,805
Dan Phipps
America's Realty Associates - Modesto, CA

Amen Brother!!!

An not only can any half-recent Realtor tell you why the market has dropped, but we've also been saying it would happen for years. I can think of many times that myself, as well as many others, said that this exact scenario would happen even before the tax credit came into effect.

Maybe it's just too simple for the ultra educated to grasp.

May 31, 2011 12:52 PM #8
Rainmaker
1,536,364
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Absolutely, right Dave.  I get so frustrated that the news and the TOPUS tells the American people things that simply are not true.  Our market dropped another 20-25% since this time last year.  We're selling about 25% of what we did three years ago.  The market in this part of VA has not recovered.  Actually, it's down enough to run 1000 realtors out of business.  It changes the way we market, work and create business, but lying the general public over the airwaves hurts all of us.

May 31, 2011 02:34 PM #9
Ambassador
2,007,427
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Dave - But, sixty second sound bites sound so good.  Who wants complicated any way? LOL

May 31, 2011 03:26 PM #10
Rainmaker
1,558,046
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Superlative post!  Not only the 2010 tax credit, but the affect of foreclosures, short sales, and the overall mess the banksters made of the market.  Nope, pundits are "sponsored" by the banksters who wants customers' ass-ets.  Oh, those delay / denial loan mods, shorts sales that go into foreclosure could never be the problemo in a declining market.  Before a housing story is run, the pundits are busily checking their palms for the sponsors and ads that grease them.

May 31, 2011 03:53 PM #11
Rainmaker
525,189
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Mike #1 - I watched an interview with Shiller from the Case & Shiller index. He clearly talks about the absence of the tax credit. The problem is when it gets dumbed down for the teleprompter news deliverers they leave out the analysis.

Rebeka #2 - Many pranks have been played by changing text on a teleprompter. You either know your stuff or you need a teleprompter.

Fernando #3 - Thanks! That is a great compliment coming from you. I enjoy the breadth and depth of your posts.

Joshua #4 - If they think the sky is falling, at least give us more explanations. We can think, too.

Ruthmarie #5 - It is a great time to buy a home, but the home should NOT be considered an automatic equity generator.

Gregory #6 - I agree. The practitioners in the field witness the reality at real-time and hear from buyers, sellers, loan officers and appraisers what's really going on - now.

Lehel #7 - I also don't think the bottom has been found yet.

Dan #8 - What a brilliant statement on your part; "Maybe it's just too simple for the ultra educated to grasp."

Mike #9 - I attribute it more to lack of thoroughness.

Christine #10 - LOL! Exactly.

Carla #11 - Quite a theory. I just think the pundits are asked to write something up, anything, under a deadline. No time to really learn the topic and not enough airtime to get the full story across.

 

 

 

 

 

May 31, 2011 05:51 PM #12
Rainmaker
1,142,035
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Dave. Pundits want soundbites. Facts don't come into play at all. All I keep hearing about is the "double dip". When the reality in my market is that values are still declining and have never stopped. But it's a strange market. Properties are selling like hotcakes. Inventory is very low. But yet values are still declining. Doesn't make any sense.

Jun 01, 2011 12:27 AM #13
Rainmaker
527,953
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
Vice President of Mortgage Lending, Marin County

Values will stay in the downward spiral so long as bank and government policy direct that they should.  It would appear that the attitude in Washington is still tilted toward promoting a more restrictive lending policy (skin in the game) and I blogged about this yesterday as well.  Check it out if you get a minute:  http://actvra.in/bFn

Great post.  Thanks!

Jun 01, 2011 01:54 AM #14
Rainer
325,617
Judy Chapman
Referral Network of Illinois LLC - Chicago, IL

Dave, People's memories are very short. Bryant's take is on the mark as well. The market has never stopped going down. Maybe it's taken a breather. But it keeps going down, down, down. When will it stop no one knows. Excellent post.

Jun 02, 2011 11:59 PM #15
Rainmaker
1,036,503
Kathy Clulow
RE/MAX All-Stars Realty Inc. Brokerage - Uxbridge, ON
Trusted For Experience - Respected For Results

Dave - There are so many different messgaes out there the consumer is getting gun shy ..... and the amount of bad news individual REALTORS® put out does not help matters either we need to start looking for the good news and talking that up instead of the bad news .

MY GLASS IS HALF FULL NOT HALF EMPTY

Jun 03, 2011 07:32 AM #16
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
525,189

Dave Halpern

Louisville Short Sale Expert
Ask me a question
*
*
*
*
Spam prevention

Additional Information