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| Housing Prices Stronger Than You Think ?
July 27, 2006
"Facts all come with points of view, facts don't do what I want them to," the band Talking Heads once sang. I'm reminded of those lyrics when I read recent reports about the housing markets. Closely-watched releases like the National Association of Realtors report on existing home sales that came out on Tuesday can send shivers through the financial markets. But more often than not they just leave folks scratching their heads. Sales are down, but prices are up? What does that mean? In their quest to interpret such data, reporters and analysts often choose whatever number best illustrates the point they want to make. BusinessWeek Online reader Frank Pecarich notes how one Sacramento writer highlighted the number of homes on the market as being the highest since the early 1990s, but failed to say that the population has grown since then. As a percentage of the market, those inventory numbers might not be that bad. Another one to watch out for as housing prices slow, many markets are still reporting year over year increases in prices. But in some cases those same prices have declined in recent months. The big picture clearly shows the real estate market slowing. Right now though it looks much more like a soft landing than a crash.
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As you said, the point of the data is all in how it is interpreted. Depending on which economic indicator you look at you can make a case for steady growth, a slight decline, or even massive depreciation. From what I have read, it looks like results will vary by local markets and regions. Areas like San Diego, CA and Southern Florida will likely have a correction. Other areas around the country will most likely continue a slow and steady appreciation.
Posted by: Barrett Niehus at July 27, 2006 11:52 PM
Again, that is the general outlook for the whole nation but it varies from county to cities. Some cities never appreciated as much as others and are not fluctuating as much as other over-hyped cities.
In the end, what is interesting to know is what is going on nation-wide but more important are the local markets. It's like saying the economy is great because a few Bulls trade more when consumers feel the pinch.
It's all relevant depending on which side of the fence you sit and what city you are eyeing.
Posted by: Nick at August 3, 2006 06:58 PM