May 16, 2006

FLASH: US Median Single Family Home Price Falls Again


You won't see it reported correctly in the MSM, where they'll incorrectly compare Q1 median price 2006 to Q1 median price 2005, stupidly and lazily as the rip-and-read MSM tends to do.

Do you compare the cost of Pepsi in the supermarket against a year ago, or last week? Do you compare the cost of a new car vs. a year ago, or the price you saw it for last month. Exactly.

Here's the truth

Q3 2005 $227,600
Q4 2005 $225,300
Q1 2006: $217,900

Gee, I think there might be a trend there. Yes, Virginia, housing prices do decline.

Finally, here's the lipstick on the pig from the corrupt David Lereah of the NAR - which again, the lazy MSM picks up without questioning:

"With the supply of homes picking up very nicely in many areas of the country, pressure is coming off of home prices," Lereah said. "By the time we report second-quarter data, I expect most areas will be returning to normal rates of price growth in the single-digit range. Consumers generally can expect normal price appreciation for the foreseeable future, providing solid returns over time."

Can someone wake the MSM up? Good god talk about lazy and incompetent. Doesn't anyone go to journalism school anymore? Or do they all just reprint NAR press releases?

26 comments:

Keith Miller said...

It makes sense to compare sales to the same time last year, but not prices.

David said...

Great post Keith.

In general the MSM has been doing a lousy job covering the housing market over the past 4 years.

David
Bubble Meter Blog

Anonymous said...

and that's why people have turned to the blogs in mass (and also turned off the msm)

twib said...

Be patient. Even comparing yoy, you'll only have to wait another few months for every media outlet to report crashing home valuations.

new 200 Mbps BROADBAND over POWER LINES said...

April housing starts, permits drop
Report signals further cooling of once-hot real estate market


Updated: 9:05 a.m. ET May 16, 2006
MSNBC Real Estate

David said...

"Be patient. Even comparing yoy, you'll only have to wait another few months for every media outlet to report crashing home valuations"

True.

tom stone said...

the msm is controlled by a very few large corporations,and is dependent on advertising,real estate ads in my local paper probably amount to 50% of their revenue...jobs are hard to get in the news biz...trash the biggest revenue source of your employer and see who thanks you...

Anonymous said...

excuse my ignorance, what is msm?

Anonymous said...

msm = main stream media

my prediction:

natl median price falls to 180k

= 3 x median household income

= long-term housing trendline

Anonymous said...

Your post could have read:

FLASH: Home Prices Already Drop $10,000 From the Bubble's High

Anonymous said...

I used to date a girl that looked like that. I'm glad to see she is doing well.
Roid

Osman said...

Surprise surprise, I don't agree.

Nation wide, real estate is generally much more active in the late spring and through the summer.Seasonality will impact volume and median price and so year/year data is more relevant than quarterly or monthly changes.

I don't really have time to do the digging. Does anybody know if there have been greater month/month or quarter/quarter changes in national median sale price? If so, how much and when?

I wouldn't be suprised to see greater drops/increases in the last 10 years.

uknowwhoiyam said...

Oooh, good article. Thanks for posting that.

Keith Miller said...

Osman:

more active = more people buying and more people SELLING = no real reason for prices to rise, no? I know median prices do tend to have similar fluctuations compared to other years. I think the primary reason spring/summer seasons are most active (especially here in sunny so cal) is due to kids being between school years. Families with kids need more room = more expensive homes = higher median prices.

Anyways, I think Qtr to Qtr is better then YoY for analyzing trends. But QtrX to QtrY compared to last years QtrX to QtrY IMO is even better.

YoY here last summer was ~16%, now its hovering around 10%. From that you can tell there is downward momentum, but somebody can spin that as "HOUSING UP 10%!!!!" The headlines will look fine until you see -YOY to the masses, but people with a closer watch will know the market turned 10 months ago.

uknowwhoiyam said...

Pretty good review of the NAR's latest "spin": http://tinyurl.com/jvceq

Budvarr said...

I used to date a girl that looked like that. I'm glad to see she is doing well.
Roid

Daddy is that really you???

Anonymous said...

"With the supply of homes picking up very nicely in many areas of the country, pressure is coming off of home prices," Lereah said.

WOW!!!!!

Did he hear what he said????

Maybe he meant "With the GLUT of overpriced homes up for sale, a collapse in prices and the real estate market as a whole is right around the corner."

iwishitweretrue said...

Okay Keith so I will take you at your email type. That $500K CA home has only made $50K YOY going into summer this year vs. $80K YOY last year. If that's not a crash I've never seen one. I guess when we are only making $2K a month off of appreciation we will have to wear our "The Great Depression is Here" T-Shirts to go to the unemployment line.

Keith Miller said...

iwishitweretrue:

I doubt your talking to this Keith simply because I don't know how you came to your conclusions of what I meant from what I said.

I'm interested in the future, not the present. Would you keep investing in real estate until you didn't increase your equity every month? By that time it would be too late, and you couldn't realize all the gains you thought you had.

iwishitweretrue said...

You are correct Keith. I would not want to hold the house until the appreciation stopped. I do hope this blog is right but from what I have witnessed personally in the beach cities of California real estate is still moving fast with little price resistance. I do get confused by the statistics I read hear on inventory and prices but will have to assume my personal sample is too small.

Anonymous said...

watch "absorption rates" closely. It's a time-tested yardstick for home sales. Does it prove that the Housing Bubble has already popped? You bet it has. Read more ....

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