<p>Take a look at the data. You will find that the markets that showed price increases are mostly those that have lots of new home construction. </p>
<p>And of course it takes a lot of houses in a large market. A large market is defined as one with “a lot of houses”. But you miss the point. It is not the numbers, it is the mix. Do the math. If one out of five houses sells for double the average of the rest, the all 5 appear to be up 20%. And remember, it is only those that sell that get counted.</p>
<p>I agree that the increases in past years were real. I sold 18 months ago in Boston, made a real gain, and am glad I sold when I did. </p>
<p>BTW, we’re renters now. We could pay cash in a lot of markets, I suppose, but it’s not worth it when one can rent a house for only 2-3X the property taxes on that same house, which we’ve done.</p>
<p>Please identify any metro area and I will tell you how much the average exisiting home was up or down in the last three years. I will also tell you the number of new homes vs the total housing stock to show how miniscule the impact would be in thousands of sales. Remember any new home would have to be RESOLD to enter the data.</p>
<p>For example the Boston area had an increase of 14% from 2003 to 2006 and builds under 3,000 new SF units per year. That’s less than 1% of the housing stock.</p>
<p>OK. Barrons is using federally collected stats based on Fannae Mae mortgage data. It does not include new sales, only repeat sales of existing houses.</p>
<p>I guess Barrons does not trust us with the underlying data, as I had to dig the reference out myself.</p>
<p>There are some very interesting details in the report. Page 6 has an especially interesting graph that shows how REFINANCINGS have distorted the reported figures (inflated appraisals? You be the judge)</p>
<p>Keep in mind, too, that this data trails by quite a bit. The report that just came out reflects financings that close March to June of this year, which in turn reflects sales that occured some time before that. No doubt the numbers reported are a good 6 months out of date. </p>
<p>Barrons, you are welcome to make your decisions on such old data. I’ll keep renting.</p>
<p>A big one that I see (but just a small piece of the pie here) - oil product prices - seriously - alot more expensive where I am than 50 miles away from here… General cost of living is high - so driving buyers away for now… HUGE increase in competition - 49% more homes for sale right about now in this area…building has decreased substantially here…slow sales here all way around And we are not even METRO LOL</p>
<p>Ya know what is soooooo sad… In this area - our young folks leave for college and don’t return to live … they cannot afford to return to where they were brought up - so they leave and go elsewhere :(</p>
<p>It’s absolutely true. Our property taxes are a decent salary, and there is an untenably high cost of living, when one factors in energy costs, health care costs, housing costs (all at or near highest in the country).</p>
<p>During the Dot.com heyday, we were on a roll here in MA. Since that bustup, people have been leaving the state in droves. The drop in real estate prices and higher inventories reflects the fact that people are sick of paying $700K for a ranch.</p>
<p>No, my data is from Economy.com which uses NAR data which in turn is sales of all existing homes and does not include refi data. It also uses median rather than averages which mitigates the impact of a few high sales.</p>
<p>BTW Moody’s which produces the Economy.com reports is one of the more bearish on the home price outlook.</p>
<p>Barrons, so you don’t even deal with primary sources? No wonder you find such interesting “back up” for your assertions. </p>
<p>One really needs to dig a bit further, I’m afraid, in issues like this, especially when there is such a big lobby like the NAR (Nat Assoc of Realtors) always trying to tell us now is the best time to sell and buy. </p>
<p>Sorry, barrons, there are just too many people who gain from these transactions (Brokers, lenders, attorneys, Title insurers, local tax authorities and so forth), for us homeowners to put much value in most of the published reports. </p>
<p>It is interesting that the only ones who typically lose in these transactions are the buyers and sellers because each is hit with huge transaction expenses.</p>
<p>All I can say is, fellow gentlereaders, when it comes to real estate articles, we really need to dig a bit to see what the source of the data was, its limitations and so forth. It is unfortunate that few media outlets will touch a story with any negatives. Your local paper won’t - too many advertising $$ at stake. Same with your other local media outlets. National media? Advertising $$ again. And don’t believe for a second that pressure from advertisers does not happen, or that it does not work. It does.</p>
<p>Economy.com and Moody’s are widely respected economic research firms and provide 10 years worth of data in a handy format for several hundred metro areas. It is accurate and efficient to use compared with trying to go to that many cities and trying to find the data in a similar format. </p>
<p>A person from Economy.com was featured on NPR yesterday commenting on the home market. Your only decent point was concerning improvements made to homes. That is not measured but for every home that is significantrly improved there probably is one sold by a little old lady who has not changed a thing in 40 years.</p>
<p>I invite you to visit their website and see for yourself what they do.</p>
<p>Economy offers a variety of products for different markets/customers. It is unfortunate that the absolute best product in this arena, the Case Shiller indices, are not available without an expensive subscription. </p>
<p>Barrons, do you subscribe to their content? If so, which?</p>
<p>BTW, I would strongly disagree with your statement “for every home that is significantrly improved there probably is one sold by a little old lady who has not changed a thing in 40 years.” Having bought a number of houses, and looked at a lot in the past 18 months, I can tell you the ratio of total rehab versus LOL40+ houses is more like 10:1.</p>
And we are not even METRO LOL</p>