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Existing Homes Sales UP and New Home Sales DOWN...Is This a Good Thing? Not for the Media

By Ken Montville

Real Estate Agent with RE/MAX United Real Estate

January 31, 2009 09:59 AM

In another post I wrote recently, I was holding forth on the seeming paradox of the recent statistics from December 2008 that showed existing homes sales were UP by 6.5% while new home sales were having their worst time on record.

Since the stats come out a few days apart and they come from different sources (existing home sales stats came from the National Association of Realtors and the new home sales came from the Commerce Department), the great news about existing home sales got a lot of media attention...for two days. Then the negative number for new home sales came out and, now, that's all you hear.

Wouldn't you think that the media has had enough?

It seems that they couldn't stop screaming about how the house prices were going up...up...up in the early "00s. In fact, behind Wall Street whiz kids and corrupt lenders, I would put the media close to the front of the line in fueling the "frenzy" that was going on. Now, it seems, the just can't get out of this broken record rut they're in.

Sure, I'll be the first to say that one month does not a trend make. I would like to see three or four months or consistent upticks to feel confident about home sales - existing or new. I just get a little crazy when there is actual, good news backed by empirical fact and the media chooses to ignore it.

OK, I'm off my soapbox now.

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Dr. Stacey-Ann Baugh

Century 21 New Millennium - Upper Marlboro, MD

A doctor who makes house calls.

If things are going well the media would have nothing to do. I think they are talking us into even worse economic problems because they are making everyone scared to even buy bread. Good news will always be ignored because its not as exciting.

Jan 31, 2009 10:12 AM

Terry Haugen STAGE it RIGHT! 321-956-2495

Stage it Right! - Melbourne, FL

Yeah Ken I'd like to see a trend before we consider existing home sales on the uptick. What NAR and the media don't report is the majority of those houses are foreclosures and short sales being snapped up by investors. To me that uptick talk is totally meaningless when the average seller can't sell their home. The media being what it is these days, we can't expect them to cover any positive news for very long as they have morphed into the bearer of bad tidings.

Jan 31, 2009 01:28 PM

Patricia Kennedy

RLAH@properties - Washington, DC

Home in the Capital

Ken, whenever I've covered any topic closely, I've noticed that most of the media gets it wrong. Excpet maybe the Wall Street Journal.

Jan 31, 2009 02:59 PM

Alan Gross

PrimeLending, A PlainsCapital Company, Equal Housing Lender - Bethesda, MD

Loan Consultant

You know the media, good news doesn't sell. Along with an increased interest from buyers for homes I am starting to see an increase in inquires about loans from people wanted to invest in real estate. It seems some investors now feel the current prices of homes make it great time to acquire investment property. It might be a new angle for marketing.

Jan 31, 2009 08:35 PM

Ken Montville

RE/MAX United Real Estate - College Park, MD

The MD Suburbs of DC

Stacey-Ann -- You only have to look at the rest of the economy to know that's true. Retail sales are down. Even food purchases.

Terry -- Investor activity is often a leading indicator. Regardless homes sales are home sales and whether it's an investor or someone buy a primary residence any increase in activity will help stablize the market

Pat -- I'll confess to not ready the WSJ unless I'm in a doctor's office who happens to subscribe.

Alan -- Investor activity is good, too (see note to Terry)

Jan 31, 2009 10:13 PM

x Bye Bye

x - Bay Minette, AL

Delete Account

Ken - I finished January with a slight increase in inspections done over last January and most were individuals buying upgrade homes to take advantage of the foreclosures on the market.

We can not count on the media to report the truth because it does not sell.

Jan 31, 2009 10:28 PM

Ken, I think we need to see consistent sales to consider the beginnings of market stability. ARMs are getting ready to reset once again and that doesnt bode well for the existing marketing inventory. Stability won't happen till the inventory is drastically reduced.

Feb 01, 2009 01:06 AM

James Downing - Metro DC Houses Team REALTORS®, CRS, GRI, ABR,MRP, MilRes

Real Living | At Home - Washington, DC

When Looking to Buy or Sell - Make the Right Move

Ken; you know I can't stand the media. I don't what the subject is - it is always overkill. Bad news seems to sell better than good news. I don't get it.

Feb 01, 2009 07:21 AM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Ken, I agree that the media likes to latch onto "bad" news. Because human nature thinks that "good" news is not interesting. Anyway, there are many good things about a LOW priced market -- the buyers are starting to come out of the woodwork now!

Feb 03, 2009 01:38 PM

Existing Homes Sales UP and New Home Sales DOWN...Is This a Good Thing? Not for the Media

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