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Convenient Truths

Posted by: Chris Palmeri on 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.

Reader Comments

Barrett Niehus

July 27, 2006 11:52 PM

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.

-Barrett N.


August 3, 2006 6:58 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.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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