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Is the median price a true measure of home values?
April 3rd, 2008, 12:01 pm · 40 Comments · posted by Jeff Collins
In a recent blog post, Zillow.com’s numbers guy, Stan Humphries, analyzed Orange County home sales by quarter for the past two years to see how well changes in the median sales price corresponds to changes in home values.
Humphries’ conclusion: not well at all. After dividing O.C. home sales into four groups, or “quartiles,” from lowest price to highest, Humphries concludes that median prices are influenced by the proportion of sales in each price category, rather than changes in home values:
“If homes that sold were a representative sample of all homes in Orange County, we’d expect to see that the [number of homes sold] for each quartile in a given quarter was the same (exactly 25%). If this were what we found, then taking the median sale price from among those homes would be a good measure of the median value of all homes …, and changes in the median across quarters would correspond to changes in home values alone (and not correspond to changes in the mix of homes sold). Unfortunately, we see that the quartiles are not equal each quarter.”
Later, he adds:
“In short, the median sale price is generally not a very reliable indicator of home value changes over time. The reason for this shortcoming is that it conflates two independent characteristics of the housing stock – changes in home values and changes in the mix of homes sold – when we really only want to measure one characteristic – changes in home values.”
To read the complete post, CLICK HERE!
April 3rd, 2008 at 12:11 pm
I’ve said on the blog many times in the past that the best way to measure home prices is not the median but the Case/Schiller index.
http://www.nationalbubble.com/home-prices-continue-to-fall/
April 3rd, 2008 at 12:52 pm
So basically the dumps in Santa ana and garbage grove are skewing the median. Like I have been saying all along.
April 3rd, 2008 at 12:57 pm
Median is an absolutely stupid metric for home prices. It has far too many influences and too many misunderstand what the data is telling them because they take it as a single data point instead of in conjunction with volume and inventory, when it has a slightly better chance of telling you what is going on. The realtors live and die by the median and once market clearing prices start being hit and market start picking up the median is going to take a swan dive.
In times of low volumes it is tough to for any metric to provide a true sense of market value. The fact that volume is low is telling you much more than the median price ever will. Think econ 101 supply & demand chart with prices being high and sales being low (out of equlibrium) if you tried to do any comparable price metric at that juncture the price will still come back too high regardless of the metric.
April 3rd, 2008 at 1:07 pm
The dumps in Santa Ana may be skewing the overall median, but you can look at each zip code! All you have to do is going to redfin.com or zillow.com and look at sales history on several homes and see what the actual sales prices are. They are falling quite a bit from 2005/2006 in most areas of OC.
April 3rd, 2008 at 1:09 pm
A single number can never fully characterize a complex market or system. However, the medium does give an indication of the markets direction. It is, of course, very important that the values be calculated consistently in up and down markets.
April 3rd, 2008 at 1:11 pm
People have been making this point since Lansner’s blog started.
Funny (not really) how it takes an expert to validate this idea.
It’s not only the Santa Ana dumps that skew the median- when volume is low, a multi-million dollar sale has the same affect.
April 3rd, 2008 at 1:21 pm
Many bears have stated this over the past years on this blog. But the Permabulls convinced us by now that the Median price is a valid way to track the market.
April 3rd, 2008 at 1:37 pm
Quick, put a chair under Lee.
April 3rd, 2008 at 2:13 pm
Per square foot by zip code…listing and selling over a 10 year spread and you have all you ever need.
April 3rd, 2008 at 2:14 pm
the only gauge worth less than the median is the opinion of a realtor.
April 3rd, 2008 at 2:22 pm
“the only gauge worth less than the median is the opinion of a realtor.”
Very well said DidDoug!!!
http://www.nationalbubble.com/realtors-goal-deny-deny-deny/
April 3rd, 2008 at 2:23 pm
Since the median is not an average, the sales price of dumps in Santa Ana won’t affect the median.
If the dumps were selling at a faster pace than the rest of OC, it might affect the mix of sales, but why does anyone think Santa Ana is moving homes quicker than the rest of OC?
April 3rd, 2008 at 2:31 pm
Friends, this isn’t rocket science!
Do we also need an “expert” from Zillow to tell us that 2 + 2 doesn’t equal 5?
Anyone who knows what a median price is knows “it conflates two independent characteristics of the housing stock – changes in home values and changes in the mix of homes sold – when we really only want to measure one characteristic – changes in home values.”
Gawd–I’ve been posting that on this blog and on my own blog forever! Even back when I was considered a “bull!”
Most recently, after DQ’s Feb. median was announced, in a March 14 post, “More on DataQuick’s Latest SoCal Median Price Stats” I wrote, “we believe prices actually peaked in the summer of 2006, based on comparable homes. DataQuick’s 7 county numbers were skewed by the huge foreclosure problems in the Inland Empire, as well as inherent flaws in their median pricing system.”
Next maybe Zillow will “discover” that the March median numbers DataSlow will be releasing in another ten days represent homes that mostly went into escrow from January 1 - February 15–a “median” date of almost three months before DataSlow will announce this “news.”
Bottom line: the median price is unreliable and the data is almost 3 months old!
Both of these disclaimers should be at the front end of every post and article about DataSlow’s median price statistics. At least on the Register’s blogs and print. Let the big boys up the 5 continue to mislead their readers.
Please?
April 3rd, 2008 at 3:16 pm
It really doesn’t matter if we think it’s accurate or not. The facts are most people (especially in OC) use it as a barometer.
The median price has been a huge selling tool for our local Realtors. They love to use it when the market is hot to create further momentum. And the media has been there to help them out …. in particular our local media … anyone remember when the OC Register plastered “$500,000″ on the front page?
Will the Register blast the front page with “HOME PRICES DROP BELOW $500,000″ when the inevitable happens? Only time will tell, but I wouldn’t count on it.
The median price will probably be indicating negative figures long after the market has reversed and homes start appreciating again. But, we are very likely several years away from that.
BTW, I think the median price is a lagging indicator of the overall market condition. I do not believe it is accurate, but I do believe it can provide a general direction of market price conditions.
April 3rd, 2008 at 3:28 pm
OK, so now bull and bear alike will quit trumpeting every monthly hiccup in median price as god’s own indicator of the “true” status of the housing market?
April 3rd, 2008 at 3:45 pm
Received this email below from a lender, I figured I’d share it with you to get some more comments generated.
Christopher L Cagan, chief economist at Santa Ana (CA)- based First American projects mortgage defaults of about 300 billion through 2010, just a flea on the nation’s ten trillion dollar housing elephant. And about two-thirds of the losses will be recovered when lenders repossess homes. The mortgage business has the highest delinquencies in 23 years, however we still have some good news.
The good news is that, although the subprime business has grown rapidly in recent years, it remains a small part of the overall mortgage market, 14% of outstanding mortgage loans. And only some 13% of subprime were past due in the fourth quarter, said the Mortgage Bankers Assn. So the most serious damage is confined to a fraction of a sliver of the overall market (about 2% of total market).
This is the reality, not all the gloom and doom in the media. We are still doing aggressive mortgage programs.
Programs
95% LTV PURCHASE PROGRAM FOR NO INCOME/ASSET VERIFICATION
680 credit score needed
First time home buyer is allowed
90% LTV Purchase Program
660 credit score needed
No Income/ Assets Verified
No 4506 required
90% LTV CASHOUT ON PRIMARY RESIDENCE
Loan amounts up to $417k
No Income, Assets Verified
680 credit score needed
No Income/Asset Verification 700 credit score needed
No Seasoning on title needed or 1 day off MLS OK
75% Investment property cash out refinance with no seasoning
85% True No Income/Asset Rate/Term Refinance on Primary Residences
No Income stated on the loan application
No Assets stated on the loan application
No Appraisal required
Just need clean mortgage history for 12 months
Credit score can be low as 540
75% LTV CONDOTEL FINANCING
2nd homes only
Must be 500 square feet
680 credit score needed for No Income Asset Verification loan
70% Financing for Investments
75% FOREIGN NATIONAL FINANCING
Must have a US bank account before closing
3 credit letter references needed from country of origin
Option ARM or Regular 30 year fixed conventional loans available
No Income/ No Asset Verification
We also have several programs for people that have more than 10 properties.
Ask us if you have several properties to see if can help you out.
Recent Closings- in the last 30 days
No Income/No Asset verification on any of these loans.
95% LTV low rise condo in Tampa, FL
90% LTV SFR in San Diego, CA
90% LTV SFR in Sedona, AZ
90% LTV SFR in Baltimore, MD
What you can expect from us.
Quick Closings (close within 10 days)
Professional Service (we answer the phone and call back in a timely manner)
Prospect Qualifying (we will check your client’s credit and pre-approve them)
Experience (our loan officers have an average of 5.3 years experience)
Guaranteed Closing Costs- we guarantee our closing costs in writing so there are no surprises at closing.
April 3rd, 2008 at 4:08 pm
I don’t know any lender running such aggressive programs, I would like to know who is.
April 3rd, 2008 at 4:35 pm
“And only some 13% of subprime were past due in the fourth quarter”
I know for a fact that this is a lie. This number probably excludes loans that have already foreclosed and are now sitting on the books as REO. Also, subprime servicers don’t count loans that are 1-29 days delinquent as past due, even thought that’s exactly what they are. Who knows what other tweaking they did to reach 13%?
The real number is around 30% of subprime is past due (as was during the 4th quarter). If graphix is lurking around here, he could probably provide more specific numbers.
April 3rd, 2008 at 4:41 pm
From http://thehousingbubbleblog.com/index.html
The LA Times. “Wachovia Corp. signaled that it may no longer offer some Californians the controversial ‘option ARM’ mortgages that give borrowers the choice of paying so little that their balances actually rise.”
“However, the bank said Wednesday that the memo had been sent prematurely and that it had not decided whether it would stop making the loans. In its fourth-quarter 2007 earnings report, Wachovia said its nonperforming assets, principally loans gone bad in the housing swoon, had risen to $5.2 billion from $3 billion at the end of the third quarter.”
“If Wachovia cuts back, it could further disrupt distressed housing markets. ‘This product was the last remaining hope for the sub-prime borrower,’ said broker John Diamond of Bancorp Funding in Chino.”
“With the tightening of loan standards by the government-sponsored mortgage buyers Fannie Mae and Freddie Mac, and other lenders afraid or unable to lend, ‘this could be the ’straw that breaks the camel’s back,’ Diamond said.”
April 3rd, 2008 at 4:46 pm
fellow contrarian,
Long time readers will remember when I was trumpeting figures like that about subprimes a year ago. Basically, I was repeating what a panel of “experts” said at the October, 2006 CAR Realtor’s Expo in Long Beach. I’m pretty sure, one of them was your source, Chris Cagan, the Chief Economist at First American in Santa Ana. Pretty much said the subprime mess would have minimal impact.
Boy, were they ever wrong. I wonder if you got ahold of an old report, or if Dr. Cagan is still working from the same playbook .
I’m hoping we’re nearing a bottom too. When everybody starts saying the same thing, I figure it’s time to head in another direction.
But I sure would be leary of anything Chris Cagan says.
Last October, none of the ‘06 economic panelists were invited back to CAR’s ‘07 Expo economic panel. The new crew thought this downturn might last into 2010. But, as I reported in November (see “How Low Will Prices Go?“)they also said this downturn’s different from anything we’ve seen before, and nobody really knows what’s next.
April 3rd, 2008 at 4:54 pm
“When everybody starts saying the same thing, I figure it’s time to head in another direction.”
This sounds like good advice to me. It reminds me of how I was cleaning out my garage the other week and found a stack of some very old Register’s from the mid 1990s. They were not calling bottom anymore but were plenty negative and skeptical of any real estate recovery, guess because the false bottoms had been called for 5 (?) years before. WHen the real bottom was there not a peep about it.
April 3rd, 2008 at 5:01 pm
Jonas,
You are exactly right.
The metric I am actually looking at are the permabulls on this blog.
At the real bottom these people will be so disgusted with OC real estate they will want to puke when someone mentions anything to do with real estate.
Coincidentally this will likely coincide with some of the bears on this blog turning into bulls….. but I would focus my attention on the so called permabulls of today…….. when they are sick of talking about real estate we will be at a bottom……. this is a number of years away…..
April 3rd, 2008 at 5:15 pm
Regardless of how you do your statistics: case schiller, median price, amount per sq ft, zillow, whatever, they all point to only one direction for real estate values: down, down, and down. I love the smell of returning-to-the-mean real estate values day after day. it smells like …. rationality. But it is prozac time for our permabulls.
April 3rd, 2008 at 6:16 pm
Market comps is the only way to value real estate because thats the way the lender will do it when you apply for financing.
Replacement cost runs a close second.
And bloggers opinions are useless.
April 3rd, 2008 at 6:20 pm
Contrarian-
Wow…how is it that you just don’t get it.
No one is questioning that there are loans available. The problem is no one can AFFORD the loan payment required on a $750K house!
DUHHHHH!!!!!!!
So stop with the 95% LTV’s and start telling us the size of the loan you are trumpeting (in Real Estate…like in other things in life, SIZE matters), how much loan this will get you and what the payments are on it and what income you need to have to pay for the darn thing!!!!
This is like trumpeting the median as an indication of the health of the housing market.
Please either get smarter or stop.
April 3rd, 2008 at 6:46 pm
Realtors, Appraisers, and Lenders used Median Price to inflate prices to meet their needs.
Check your income and wallets before you make any house purchase.
April 3rd, 2008 at 7:26 pm
Marcia,
Your preaching to the choir, I’m not a lender. I said I received the email I posted from a lender. Although if I was a lender, I’d probably have much more time to contribute to this blog!
April 3rd, 2008 at 7:42 pm
I must be seeing things!!! CNBC has turned positive on the Homebuilders!!
http://www.cnbc.com/id/23938639
April 3rd, 2008 at 9:00 pm
Contrarian-
So sorry. Please excuse me.
But I would still ask that we focus on the real problem…that the average OC homeowner can afford $2000-$2500/month in house payments, which pays for a $300K loan. (please note that this excludes the beach areas before you beachies get your panties in a bunch).
Someone is going to have to explain to me how raising the conforming loan limit to $729K at 6.5%-7.0% gets us to $2000-$2500 a month. Because until it does, raising the limit won’t help…it never did.
April 4th, 2008 at 1:44 am
Carlos,
Lenders and Appraisers NEVER deal in any way with “Median Price”…only thing that matters to them is recent comps within a 1 mile radius of the property being LENT on….this is NOT in any way, the “median price”!
Marcia,
I just looked at this with my partner last week: In my personal database for the “Average” Orange County homeowner going back several years, the AVERAGE OC “household” makes quite a bit more than one who could afford only a $300,000 loan with PITI. I have every file I have ever closed in my database and out of a sample of the 91 FULL DOC OC loans I have closed since 2001 (didn’t run the numbers on merely the applications that didn’t close) the average FULL DOC income was $115,000…out of 87 LA Loans, the average income was $98,000, and the 101 IE loans, the average was $66,000….THERE is your $300,000 loan at 6%! OC average at 38% DTI would get you a loan of nearly $500,000 with a 1.25% property tax rate on top of it at that DTI. I never understood the whole “The average person can’t afford it!” statements I see…the average I see all the time sure could! However, many people are loaded with OTHER debt…heck just yesterday I had a guy with a 6-figure income who’s 3 car payments totalled $1,700/month while his home’s mortgage was $2670/mo….too much debt makes a lot of homes “unaffordable” here…tough to pay a $3500 mortgage when you have car payments at $1000+ and credit card MINIMUM’S at $800-1250 a month!
I take 5 applications a week right now in OC….more than half are for first time home buyers, the ones that would be buying the lower end of the market…I am APPROVING 1 of 5 not because of income, but because of either a lack of savings for the down or for reserves after the down has been paid or too much debt causing credit scores to be too low. Since Jan. I have had only about two or three here not qualify based on income. Put that out of your mind folks…I am in the trenches every day here and it is NOT what I see and I doubt I just get the “Money bags” folks who make good money….there are tens of thousands of families that make GOOD money here in OC….they just don’t all manage it very well! Since the lower end of the price spectrum props up the next level and so on, this is what is killing the buying market right now imo…lack of qualified buyers at the lowest end of the market! This is what is most distressing to me…not a lack of “affordibility”! Just my observation!
April 4th, 2008 at 5:07 am
Larry P.
That’s pretty much the same story I heard from my broker friend. Apparently, lot of “pend up demand” folks who make good money in OC, nevertheless, they can’t seem to get the loan go through for one of those reasons:
- Business owner & 1099 earner: make good money (based on bank statement), but not a lot based on tax return. Lof of these people make 150-250K/year or more, FICO 650-750. However, the tax write off from the last few years now come back and bite them hard. Most bank-statement program and SISA and SIVA are gone. Even with 10-20% dowypayment, it’s hard to get a loan for these folks.
- Those who make good money, full doc, but have even more debt and so-so FICO score. Combination of lousy FICO and high DTI kill the loans, even with good down payment.
- Those who make good money, but already leverage with other “investment” properties. Lot of them.
So on and so on. Sound like a joke, but to get a loan nowaday for a decent OC house, one must have:
1. Verified HIGH income. If you make $300K/year, but your CPA is too good that he manages to write of a lot for you, then bank consider you as LOW income. No joke here.
2. Good down payment
3. Good FICO. Forget those short trade line that credit repair service help to put you in, won’t help anymore.
4. Low DTI, high reserve
5. Appraisal stick with the offer price. Lot of bank cut appraisal left and right.
Any of the above factors not met, then the loan have high chance of being killed. FHA will help to skip (2) and (3), but (1) and (4) kill most FHA loan anyway.
Late last year, it was the subprime buyer who was eliminated from the market. Now, it’s the Alt-A and prime buyer who got the boot too.
Reading the guide line now is more like reading script of “Mission Impossible”.
April 4th, 2008 at 7:36 am
NO!
April 4th, 2008 at 10:07 pm
More important than one’s ability to pay is one’s desire to pay. When the market is hot people are willing to pay more for housing. That opportunity came and is now gone. Many enjoyed it while it was here.
Now that it is clearly going down, people are not willing to pay as much for housing.
REALTORS - quit calling this pent up demand. Unlike constipation (true pent up demand), what keeps spewing from the Realtors mouths is diarreah.
April 5th, 2008 at 9:33 am
Here’s a hot off the presses copy of Steven Thomas’ latest market report. ( The Bears might want to go hibernate - they’re not going to like this one.)( Jon Lansner will be reporting about this in a day or two, but you’re seeing it here, first.)
Market Time Report, April 3, 2008:
Housing Demand Stronger than a Year Ago
Good Afternoon!
Today marks the FIRST time since September 22, 2005 where demand is better than one year ago. The sold statistics, which garner front page headline attention in most media outlets, will not reflect the year over year statistics until May or even June of this year. So, you are hearing it here first, demand is actually better right now compared to last year. You can hear it in our offices too. Here’s the scoop from the trenches: increased showing activity, increased open house activity, buyers are writing more offers, multiple offers in the lower ranges and significantly more first time buyer activity. And, most of this activity was already in the works prior to the new FHA and conventional loan limits taking root in the marketplace. Buyers have been methodically entering the market since the beginning of the New Year. We started the year with demand, a snapshot of the prior 30 day escrow activity, at 944 escrows. There were only 1,473 total escrows on January 1st in all of Orange County with 14,724 homes on the market. That was an inventory of 16.45 months! Since then, demand has increased to 2,286 escrows within the prior 30 days, a 142% increase. Now there are 3,066 total escrows throughout Orange County, a 108% increase from the beginning of the year. Additionally, the active inventory has only grown by 750 homes since we sat on our comfortable sofas and sleepily watched the Rose Parade, bringing the inventory to 15,474 homes. Expected market time has dropped substantially to 6.75 months. Remember, the new FHA and conventional loan limits of $729,750 are just hitting the market now. We are achieving the increase in demand despite a major liquidity problem in the financial markets, meaning loans above $417,000 have been extremely challenging to put together unless a borrower had a lot of money to put down and cream of the crop credit scores. The new loan limits will have a powerful impact on demand. At 10% down, the old $417,000 conventional limit only covered 37% of the current active inventory. The new limits now encompass a stunning 75% of the inventory. The old $367,000 FHA loan limit covered only 23% of the active inventory. The real estate market also has the added benefit of Washington D.C. and every major player that has anything to do with the financial markets focusing programs and legislation aimed at further increasing demand and restoring the financial engine that runs our economy.
Last year there were1,464 fewer homes on the market, but demand was lower by 159 escrows. Demand was dropping fast last year due to the beginning effects of the subprime meltdown that started in March of 2007. Expected market time was almost the same at 6.57 months. Two years ago, the active inventory was at 10,714, demand was at 2,958 and market time was at 3.62 months. Bank owned foreclosures and short sales, homeowners that owe more on their home than the current value, now account for 34.5% of the active inventory. That figure was at 26% at the beginning of the year and 32.8% a month ago.
What about all of the distressed properties in the market place? Bank owned foreclosures are HOT and growing hotter by the minute with an expected market time of just 1.67 months. Two weeks ago that figure was at 2.11 months. Foreclosures only account for 20% of the total distressed market and only 7% of the entire active inventory. Thus, foreclosures are in demand and lenders are calling the shots with multiple offers and no emotional attachment to their “assets.” Their market is similar to the heydays of 2004 and 2005 for all of Orange County. Statistically, short sales have an expected market time of 10.60 months compared to 12.05 months two weeks ago. But, these numbers are not a true reflection of what is really going on in the marketplace. The numbers are grossly understated. Short sales are a totally different animal and should be treated as such. Realtors® out in the field keep a home on the market as an active listing through the Multiple Listing Service until they have formal lender approval of an offer already accepted by the seller. Even when a seller and a buyer agree upon the terms of a contract, escrow is not technically opened until formal lender approval occurs. The lenders have to determine whether or not they are willing to take less than the full loan amount currently encumbering the property. And, if there is more than one loan, each and every lender must sign off on the deal in order for an escrow to proceed. Short sales are “subject to lender approval” and can take anywhere from weeks to months. One of our associates reported from the trenches that they just closed a short sale after a seven month delay in a formal approval. That’s not even the worst case scenario, as many go unapproved and are instead foreclosed upon, wiping out any and all offers currently written on the property. So, when a buyer climbs into a car and finds a short sale that they have interest in, chances are that the home already has an accepted offer that is somewhere in the “lender approval” process. They too can add their offer to the mix and play the waiting game. Many of these short sales are priced at levels to attract buyers, discounting well below the true market price. In this case, the odds of “lender approval” on even full price offers are slim to none. As a consumer, it is best to do a bit of homework and write an offer closer to the market value, above the asking price, increasing the odds of lender acceptance. With more and more homes acquiring multiple offers, that is exactly what is occurring in the market: offers are being submitted for bank approval above the list price.
Everybody needs to keep in mind some fundamental statistics regarding distressed homes. 75% of all distressed properties, foreclosures and shorts sales, are below $500,000 and 94% are below $750,000. Santa Ana accounts for 20% of the entire distressed market in Orange County, 1 in every 5. Anaheim accounts for another 15%, 3 in every 20. The top 5 in total numbers, Santa Ana, Anaheim, Garden Grove, Orange and Lake Forest, account for 49% of all distressed properties, virtually 1 in every 2. With the exception of Orange, all have average list prices below $500,000.
What are FHA loans? The Federal Housing Administration (FHA) offers loans to consumers with some credit blemishes and/or a small down payment. A buyer can put down as little as 3%, all of which can be a gift. FHA is NOT subprime and has been around for years. This is not a program that the government cooked up to replace the void left by the sudden absence of subprime. Rather, with prior FHA loan limits well below the median sales price in Orange County, subprime filled the void. FHA loans require documentation and the buyer must actually qualify.
Buyers, what to do? Slowly but surely, more headlines are starting to illustrate improved demand and a great time to buy. It will take the better part of the next 60 days for the recent increased activity to start changing the tone of the headlines and stories completely. The facts are the facts; the lower ranges, where most of the junk loans occurred, are turning up the heat first. The increased loan limits should restore demand all the way up to $800,000. As liquidity is slowly restored to the financial markets, the upper ranges above $800,000 will in turn start to gain momentum as 2008 plods along. Demand has slowly improved as value has seeped its way back into the market. The conditions are perfect to purchase now and into the horizon: motivated sellers, plenty of homes to choose from, rates are low, new loan programs are available and there are great values out there right now. As a buyer, do not let price be your only determining factor in choosing to purchase. Price is important, but current favorable rates will not stick around forever. Prior to the financial subprime meltdown and financial crunch, the Federal Reserve was methodically raising rates to counter the threat of inflation. The threat of inflation is now high with all of the easing that the Federal Reserve has had to undertake to jump start the economy and the financial markets. Do not get comfortable with today’s interest rates, they WILL eventually increase. As soon as the economy starts humming along again, expect the Federal Reserve to reverse course and push rates up higher. By the way, for every 1% that interest rates increase, it erases approximately all of the benefits of waiting for property values to decrease 10%. The payments are virtually identical.
Sellers, what to do? So far this Spring, homeowners are NOT placing their homes on the market in foolish anticipation of a wonderful Spring real estate market. Thank goodness!!! Quite simply, sellers should continue to bide by a simple rule of today’s market: do NOT place your home on the market unless you absolutely must sell and are motivated to do what it takes to procure a sale, with the right price and condition. With only 2,285 successes over the past month, that leaves the vast majority waiting another month or months. In such a competitive market, it is all about price, location and condition. As a seller, you can do absolutely nothing about the location other than take it into consideration in determining price. Sellers do control their price and condition. After carefully determining an asking price, it still may take time, so pack your patience and be prepared to make changes as the market evolves. Unless you are prepared to market your home as a major or cosmetic fixer, great showing condition is imperative in maximizing your proceeds. Last, be prepared on day 100, just as you were during the first week, for a buyer to walk through the door. Set the stage with the lights on, soft music in the background, window covering opens and make sure your home is neat as a pin inside and out.
Have a wonderful weekend.
Sincerely,
Steven Thomas
RE/MAX Real Estate Services
President
It’s obvious by reading this report that there is a highly disproportionate number of lower priced houses now going into escrow. This MAY effect my earlier prediction that the median will actually rise in the next month or two - I said the reports for the FULL month of March and the full month of April - only the next 5 weeks will tell.
The good news is that higher priced houses ARE selling also, in higher quantities, just not anywhere near the high numbers of the lower price ranges - under $750k.
Like I’ve been saying for well over a month - there are some great buys out there right now, ESPECIALLY bank repos ( REOs.) and short sales. ( I am in escrow on one as I type.) MANY of these properties are seeing multiple offers, and not just 2 or 3.
The inventory of houses is still good, interest rates are still good,
( hey, better than the 7% when I bought my first house 38 years ago! )
and there is still some good negotiating being done.
If you are still sitting on the fence, waiting for the bottom, before you make your move into the market, you, my friends, might be staring at the wrong side of the fence. But don’t dismay, I’ll be happy to say “I told you so” in another month or two.
April 5th, 2008 at 9:37 am
I’m sorry cyber-dud by Steve Thomas is a complete shill, an empty suit
you would be better off worshiping the troll you have on the dashboard of your car