Dian Hymer, a columnist for Inman Real Estate News, pens a piece titled, ‘Housing market headlines can be misleading‘, and leads with the following three paragraphs:
“On Jan. 20, 2005, a headline in the San Francisco Chronicle stated that Bay Area home sales were down and that prices slid. If you, like many readers, scanned only the headlines, you might have thought home prices in the area had plummeted. Actually, they rose 14.3 percent between December 2004 and December 2005, according to DataQuick Information Systems.
Sensational headlines sell newspapers. Who wants to read about a real estate market that’s not as robust as it was a year ago–one in which home prices aren’t going up as fast as they were this time last year? Ho-hum news doesn’t do much for newspaper sales.
Behind the scenes of the Bay Area home sale market, the real story is not that home prices “slid” from one month to the next. It’s that the market is doing surprisingly well despite the negative press. In a nutshell, well-priced homes that are properly prepared for sale are selling for good prices and within a reasonable period of time.”
No kidding. What’s really interesting, however, is that just six paragraphs later, she adds the following:
“Changes in median price from one period to the next do not necessarily reflect changes in absolute home values. When the median price rises, it means that the number of more expensive homes sold during that period increased. Likewise, when the median price of homes sold declines, this means that the volume of lower priced homes sold increased relative to the number of more expensive properties.”
So while median prices rose 14.3 percent year-over-year, that still doesn’t necessarily reflect any change in absolute home values. Glad we didn’t just scan the first couple of paragraphs…
∙ Housing market headlines can be misleading [Inman – $]
So Ms Hymer would have us believe that the only stat. we should look at when trying to judge the health of the Bay Area housing market is year on year price differences? And that we should “conveniently” ignore things like sales volume and inventory? Throw in the seemingly obligatory realtor(tm)-swipe at the media, and Ms Hymer just went down a notch or two in my book.