Swamplot’s chart-wielding analyst is back with a few comments on the Houston Association of Realtors’ latest report and media push:
Median and average home sales prices fell $7,200 from the prior month. This was including increased activity to get the $8,000 home buyer tax credit in under the wire! Now it is not fair to compare month to month numbers as seasonal factors are working against the housing market this month.
So we get some good spin from the realtors: “Home prices up 5%†“Sales up 13.8%†…this maps directly over to the mainstream press with no research: “Home sales rise for second month,†“Home prices up 5%,†“Sales up 13.8%†Homeowners in this town should be proud that such a hardworking PR machine still gins out great product!
Why would you call those year-over-year increases spin?
The realtors get to make a press release every month and every month something is a “record†and the press is under deadlines and it gets copied in verbatim. This is home prices up 5% and sales up 13.8% from HURRICANE IKE with no caveat in the headline going out to 200,000 print readers and as many web readers! Not bad for a days work.
Oh, yeah. Forgot about that whole Ike thing. So what’s the market looking like really?
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Beyond the hype and looking at conditions right now, home prices have turned lower for the winter and activity is preparing to slow to a crawl. Listings are falling 7.3 percent as sellers throw in the towel and plan to wait until spring. Foreclosure activity is still elevated but with better comparisons. Foreclosures as a percentage of sales should rise over the next few months (and really hurt price averages) as foreclosures are not seasonal and non-stressed sales are seasonal. We got two more data points on our foreclosure graph and will have a consistent time series by year end.
In Houston we have 2 real estate markets:
- The Low End, with a steady 6 month inventory and prices (up 5 percent, according to HAR).
- The High End, with sagging prices (down 4 percent, according to Greenwood King), 18 month inventories and ongoing seller carnage.
The latest Greenwood King report (PDF) shows some amazingly out of balance months inventory in some high end submarkets:32 months to sell in Memorial! This is a good number off of 10 months of recent sales data!!!
Regarding the Homebuyer tax credit: Cash for Clunkers raised car prices by about $2,000, lining the pockets of car dealers. If the average home price in Houston is $200,000 and the homebuyer credit is “driving sales,†it does not surprise me that $8,000 (4 percent) gets temporarily tacked on to prices.
- MLS Report for October 2009 [HAR]
- Houston Market Report (PDF) [Greenwood King]
- Home sales up for second straight month [Houston Chronicle]
The patron saint of realtors used to be St. Joseph. In Houston apparently it’s St. PT Barnum. “There’s a sucker born every minute.”
I’m becoming convinced that Matt is the “mystery reporter” which is sad because he is the least objective poster on this site.
“This is home prices up 5% and sales up 13.8% from HURRICANE IKE with no caveat in the headline going out to 200,000 print readers and as many web readers!”
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You’re correct, it wasn’t mentioned in the headline…it was in the sub headline.
This is directly from the press release:
“Houston Real Estate Market Enjoys Second Consecutive Month of Positive Sales Volume and Pricing in October
Comparison to hurricane-battered market and 2009 homebuyer tax credit are factors”
It’s also in the first line of the article:
“the lingering effects of Hurricane Ike back in October 2008 combined with recent homebuying activity spurred by the federal government’s $8,000 first-time homebuyer tax credit produced positive numbers for the Houston real estate market in October.”
By all means, report away about the evil real estate industry. Just try to mix in a few facts with your ramblings.
Facts? From HAR?
Yes. Facts from the press release that was being referred to.
Feel free to read it for yourself.
…from the press release…
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Enron sent out lots of press releases…
I write press releases for a living. My job is to spin facts and stretch the truth to make my clients look good. Then they edit it more to make it even fluffier. There’s a difference between reporting and corporate “news”.
And reporters who simply report press releases aren’t reporting.
But then the only reporters in town are at the Houston Chronicle and some at this point might question referring to them as reporters.
Amazing what billions in zero-down financing from the FHA will do. It’s like pre-2007 all over again. Banks make loans to people who shouldn’t get them and dump them onto the taxpayer while keeping the gravy.
15% of FHA insured loans are now delinquent. The FHA is the new Fannie Mae and will wind up with >$100 billion bailout over the coming years.
Here’s an example of the stupidity going on now in a vain attempt to prop up housing prices that need to fall to their natural level:
http://feedproxy.google.com/~r/CalculatedRisk/~3/qBV2oUfuFZI/more-on-fha-loans.html
It seems the Feds and the Fed are willing to destroy the dollar and our economy to keep real estate prices from getting real.
It’s like pre-2007 all over again
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And the realtors and mortgage brokers are singing “Happy Days Are Here Again…” as HAR sends out its manipulated figures and warns everyone to buy now because the prices are going to keep rising. And some believe it. And buy.
Urged on no doubt by HCAD which is desperately trying to fight a growing number of lawsuits over their interpretation of “market value” which is curious at best given the disparity in both land and improvement value in certain areas. Just to give an example of how HCAD actually appraises everything, on one block of one street in one area in Montrose, the land value of one home is $30 a square foot. The land value of another home is $55 a square foot. They should have had Bernie Madoff set up their “auto-appraisal system” which might have lent some consistent basis of value.
^^ Is it lonely up there on that podium?
^^ Is it lonely up there on that podium?
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So you’re one of those who likes to brag not only about how much you paid for your house but how much you pay in taxes?
HCAD is worse than the Mafia.