By Glenn Roberts
Okay, Admitted. A little more Times bashing for today. The Wednesday Seattle Times has two articles in the business section. The feature is headlined "U.s. Home Prices fall, more declines seen." This article is datelined Washington (and they mean D.C.). It's from information released a week or so ago put out by Case-Shiller, a company that claims to follow same house resales over long periods of time.
Two things about Case-Shiller's information.
1. It is always two months old based on closed sales which are also two months behind the current market. So, figure 4 months stale.
2. In following the sale of the same house over time they don't, as far as I know take into account remodeling/deterioration. Back between 2002 and 2007 home improvement stores were booming because people were pouring money into their homes and re-tapping them for equity. Houses were getting improvements so the values should have gone up. Essentially they were not the same homes that sold two or three years earlier, even though they had the same address. And from 2007-present, most people stopped putting money into their homes and many of them have deteriorated, resulting in a home of less value. Same address, but now a fixer/shortsale/REO. Selling for less: No DUH!
Also published at www.glennaroberts.com
Two things about Case-Shiller's information.
1. It is always two months old based on closed sales which are also two months behind the current market. So, figure 4 months stale.
2. In following the sale of the same house over time they don't, as far as I know take into account remodeling/deterioration. Back between 2002 and 2007 home improvement stores were booming because people were pouring money into their homes and re-tapping them for equity. Houses were getting improvements so the values should have gone up. Essentially they were not the same homes that sold two or three years earlier, even though they had the same address. And from 2007-present, most people stopped putting money into their homes and many of them have deteriorated, resulting in a home of less value. Same address, but now a fixer/shortsale/REO. Selling for less: No DUH!
Despite their cachet as a national authority, the model of the American Home has changed. Think about it. A spreadsheet model devised back in the 2000 is no model for today.
Article #2. An enlightening article given by Froma Harrop datelined Providence. I'm assuming that's Rhode Island and not some ethereal point of wisdom. Her article is based on Zillow.com statistics which by Zillow's own admission have a median error of between 8.5 and 15.4%. Median would mean that half of the estimates are above and half below, so some can be pretty far off.
Ms Harrop continues her article in the political vein and advises elimination of any government incentives which encourage home ownership, citing Canada as a model. Harrop likes to write about everything from where ever her apartment is.
Her article is not in the online Times edition so I can't link to it. John Talton regurgitates the same Case-Shiller information as above in his piece about the American Dream. Apparently the Seattle Times can't afford local writers for most of their work and one would do just as well to read the pulp in USA Today. Or maybe local writers won't write articles with messages they are instructed to convey.
I'm glad to see the Times' prices rising. It will make it easier for me to stop the subscription come April 1st. No joke.
Article #2. An enlightening article given by Froma Harrop datelined Providence. I'm assuming that's Rhode Island and not some ethereal point of wisdom. Her article is based on Zillow.com statistics which by Zillow's own admission have a median error of between 8.5 and 15.4%. Median would mean that half of the estimates are above and half below, so some can be pretty far off.
Ms Harrop continues her article in the political vein and advises elimination of any government incentives which encourage home ownership, citing Canada as a model. Harrop likes to write about everything from where ever her apartment is.
Her article is not in the online Times edition so I can't link to it. John Talton regurgitates the same Case-Shiller information as above in his piece about the American Dream. Apparently the Seattle Times can't afford local writers for most of their work and one would do just as well to read the pulp in USA Today. Or maybe local writers won't write articles with messages they are instructed to convey.
I'm glad to see the Times' prices rising. It will make it easier for me to stop the subscription come April 1st. No joke.
Also published at www.glennaroberts.com
Marjie Cunningham
Danny Adamson
Karissa Webster
Aune Tietz
John "Mack" McCoy
Allen Jaworski
Glenn Roberts
Jason Wall
Claire Zaner
Tuesday's P-I had a story on Tuesday where Robert Shiller was quoted, "My intuition rates the probability of another 15, 20, even 25 percent reduction in real home prices as substantial."
In the next paragraph, Karl Case was quoted as saying, "It doesn't necessarily meant that we're going to have another 30 percent or 10 percent or even 5 percent down. It's conceivable that we get a recovery, because it doesn't take a lot of people to move the market, and it's hard to measure fundamentals.
The story's headline? "Home prices won't recover soon, experts say"
Mack - Paying attention to the experts may put some buyers securely in their rental houses for a long time to come. But, only those that really want to buy should be in the market place. One should never buy because other people are encouraging them to buy.