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Why "Data" From Trade Groups is NOT to Be Trusted: National Association of Realtors Edition
I don't care whether the data if from the National Retail
Federation, the Mortgage Bankers Association, the National Association
of Home Builders or, my personal favorite, the National Association of
Realtors or any other industry group. It's ALL garbage!
DO.NOT.TRUST.THEM! They exist for the singular and sole purpose of
drumming-up business for their members; retailers, mortgage brokers,
home builders, and realtors, respectively. Their "data" and "analysis"
will, with almost 100% certainty, grossly overstate any realistic
projections and even worse, produce misleading historical "data" to
boot!
Compare Recent data from the National Association of Realtors (pdf) with the data from analytics company Corelogic (CoreLogic_December_2010_HPI,
I have the Excel file but can't upload to Wordpress). NAR says the
price on existing home sales increased 0.5% in 2010, while the price on
new homes increased 2.2%. Corelogic's national single-family combined
home price index shows a -5.46% change.
Who do you believe? The industry group that represents people who
make money when houses are bought/sold for the most amount of money, or
an independent analytical shop that uses a pretty robust methodology
(reproduced below)?
The CoreLogic HPI incorporates more than 30 years worth
of repeat sales transactions, representing more than 55 million
observations sourced from CoreLogic industry-leading property
information and its securities and servicing databases. The CoreLogic
HPI provides a multi-tier market evaluation based on price, time
between sales, property type, loan type (conforming vs. nonconforming),
and distressed sales. The CoreLogic HPI is a repeat-sales index that
tracks increases and decreases in sales prices for the same homes over
time, which provides a more accurate "constant-quality" view of pricing
trends than basing analysis on all home sales. The CoreLogic HPI
provides the most comprehensive set of monthly home
price indices and median sales prices available covering 6,208 ZIP
codes (58 percent of total U.S. population), 572 Core Based Statistical
Areas (85 percent of total U.S. population) and 1,027 counties (82
percent of total U.S. population) located in all 50 states and the
District of Columbia.
I'm not saying Corelogic's data is 100% accurate, but I will take their #'s over a trade group's every.single.time.
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http://screwtapefiles.blogspot.com/2011/02/real-estate.html Real Estate Trends for 2011 The time is now for qualified homebuyers to start looking for their dream home. Low house prices combined with low mortgage rates make 2011 the perfect time to purchase a home. Really. It’s the perfect time to jump in now and lose 10-20% of you equity by this time next year. Where do I sign up for this deal?*Buyers get what they want. Experts from the Urban Land Institute predict that homeowners will continue to buy smaller, more energy-efficient houses. Since people are looking at first homes as a ten-year commitment instead of the previous five-year, they are less likely to settle for a property that's less than ideal. Translation: People are broke so they will by a broken down shack. And who the hell are the Urban Land Institute? Did they replace the Urban council on made up statistics?
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*Qualified buyers come out ahead. Mortgage rates are still low and are expected to remain in the five percent range for the upcoming year. Mortgage lenders have tightened their lending policies, but qualified buyers who have good credit will be able to secure a mortgage at a low percentage rate. Lenders expect that borrowers will have a down payment and have a debt to income ratio that ranges from about 30-45 percent. This is terrific news. I was worried the Ben was losing control of interest rates. So there are middle class people out there that are not getting raped by inflation and taxes with good scores and the banks are lending again? Sweet. *Demand for new homes may increase. Forbes predicts that by the end of 2011, there will be a need for new houses because current building trends are not keeping up with population demands. This could eventually lead to a shortage of housing at some point in the future. Buyers interested in purchasing a new home may find prices that are higher than expected if building continues to be slow. Forbes? Jack Forbes? A good guy but he is mildly retarded. Oh, the magazine? They went full retard a long time ago. Yeah, take investment advice from the guys who didn’t see the bubble in anything. *Cash is king. Investors who can buy property with cash are at a huge advantage this year. Prices are already low, but sellers may be willing to accept an even lower cash offer to avoid having to deal with lending institutions. Cash is King. Now there is a pearl of wisdom. Where have I heard that before? “Sellers may be willing to take a lower price for cash,” Really, wow that’s good to know. The material in this publication is provided for your informational purpose only and is not intended to substitute professional advice. If your property is currently listed with a Real Estate Broker, this publication is not intended as a solicitation. This material is the same material we send out every couple of months in the hope that someone, anyone will please buy something otherwise we can’t make our own mortgage payments.
The numbers suspect because the are so few comps, not many houses are selling. As always, if you have a great location, hunker down. If not, I think there will be a long wait before people can get their money back. Even if the numbers are true, what do they mean? Sales were so low last year that a few sales now can really mess the percentages.
Something has got to give sooner or latter. People have to move.
I am in that boat now. Luckily I can rent my home for more than enough to cover fixed costs. Otherwise I would be crying.
I am looking at smaller but growning Midwestern town. The housing market above 600k is just starting to show signs of cracking as very few houses above that level have sold in a year, many owners have moved, how long will they want to carry their old house at what point do people write off their property and take the loss. The only active market appears to be sub 300k starter homes. Many in the 300-600k market are now selling a decent discounts.
I'll try some low offers if we find a place we like, otherwise might try to rent one of the homes for sale betting that the market has further to drop before a rebound. I think most RE pro's would take a flat market. It is just hard for anyone who bought since 2005 to sell now without taking a haircut. I just saw one short sale for 685k that org. was about 900k, no doubt the owners will take less. Not sure I like the home, but for the price, I could not build it today.
Did very well buying from bank in 1995. Looking to do the same soon. Sometimes it is better to be lucky than good.
Be wary with the jumbo market. That 685k short sale might have been done on the "inside" to put in a floor. A good plan is to look at foreclosure MLS listings versus NODs by zip. The shadow inventory in jumbos is the big tell on pricing.....the bigger number losses are being rationed into the market slowly.
paste it onto googe spread sheets and make viewable to all but not editable
Who doesn't know 99.999% of realtors are a joke. They run a good scam telling people they don't negotiate off 6% commission. HA! Only fools fall for that crap. There has never been a bad time to buy RE according to realtors. Hey, they ain't making any more land! LOL
I am a realtor and made a lot of money during the boom in CA. Why is that a joke? I was smart enough to cash in and your just jealous.
Off topic. I am encouraging all citizens to write a letter to the mayor of the city where they live requesting the salaries and pension of the top highly paid employees. Then send a copy of the response to local radio talk show hosts and newspapers. If someone would start an interactive website to show the salaries and benefits of employees by city, they would get a million hits per day and start the real revolution. Shine the light baby!!
You clearly missed the ENTIRE point of this article. The NAR (and its members) make $ by perpetuating half-truths (at best) and misrepresenting/manipulating home price (etc) data to make buying a home look more attractive than it actually is.
There is ZERO argument against this fact.
A salesman is a salesman is a salesman.
The real challenge in sales is spelled out by Willie Loman, who denigrated a competitor by describing him as "liked, but not well-liked!" People in sales are used to being damned by faint praise when not being cursed out loud. Sales people on the defensive will tell you if trucker trucks it, a salesman sold it. Note than since the mortgage and derivative bust, bankers are the new group people love to hate, giving sales people a break in the misrepresentation business.
There are ethical sales people out there but you have to turn over a lot of rocks to find one.
Make sure you get a 'ballon' payment! Adjustable APR is the only way to go! No money down! Flip this dump!
has it NEVER been a great time to buy ?????????
The last great buying op (where I live) was 1990-1994. Real estate prices were down 40% but rents hardly dropped, while interest rates were very low.
The next one is in progress right now. Remember, to make money, BUY low, and SELL high. So, when prices are low, you should buy - if you have the guts to go against the media, your family, your broke neighbors etc.
I did but it wasn't easy. Even when logic and math tells you to go ahead, it is hard to go against your emotions and everyone around you.
By the way, if you believe we are in for a period of high inflation, as I do, then buying real estate and financing it for as long as possible at the lowest interest rate you can get, is the best inflation hedge there is.
I have bought 4 houses a duplex and a store since last fall here in Canada. I can only look with envy at the low prices in some sections of the US.
Tulsa just became the #10 fastest growing forclosure maket last week, with a y-o-y of 34%. We are usually about 1 to 1/2 years behind the rest of the US. Hate to see what the future holds.
two forclosures on each side of me he in so cal about half mile from beach. avg houshold income in my hood is 80k, avg house is still 650k was 770 few yrs ago. try selling a house these numbers mean nuthin
At the high point of the housing market, the average price was about 4 times the average income. It has declined from that ratio since then.
Beverly Hills has one foreclosure on the MLS out of 100 in foreclosure ( 90210 ). www.doctorhousingbubble.com
National Association of Realtors get their information from the Mutiple List Data. All listings and sales are put into the Mutiple List and it is easy to compute the data.
Clearly racist perspective
National association of realtors have free land for sale...unlimited amounts...in a town called Mars...on planet mars. It's not that far...
take screetshots of the data, upload it to wordpress or photobucket, then post the links.
btw, thanks for the warning.
http://covert2.wordpress.com