The blogosphere is an interesting place. A mix of facts and opinion, over time the line between fantasy and reality can become quite blurred. Typically, we are fairly adept at separating out one from the other, and taking away what we wish. But when something as supposedly indisputable as data is manipulated to tell completely differing stories, what is a person to do?
Check out these 4 headlines from articles that have been published over the past couple of weeks:
- Prices Mostly Stabilize: Why Aren’t More Talking About It?
- 20 Cities Added to Improving Housing Market List
- Housing Picture Expected to Brighten in 2012
- Modest Volume, Price Gains Seen Next Year
What is interesting is that these headlines are designed to be the entire message they hope would-be buyers will walk away with. Take the first article. This is actually an analysis of homes in select areas that aren’t short sales, foreclosures, or subject to any government program. Headlines tend to have much less impact when they include the fine print.
After seeing articles like these, one would be led to believe that not only are conditions to buy good today, but you better act now because reports, analysis and the like indicate that these sweet conditions won’t be around tomorrow. While most Americans need only look out their window to understand that the housing picture isn’t nearly as rosy, that doesn’t make these attempts to mislead would-be buyers into quick action any less shady.
Okay, time to rip that band-aid off and learn the truth. The chart below shows what home prices have really done in the last year:
There you have it. Of the 50 states, all but around 15 or so have experienced falling values over the last year. As for the ones that haven’t, don’t assume that they have necessarily turned the corner. Some of these states have foreclosure processing protocols that are so knotted up in litigation that bank-owned REOs aren’t making their way to the market like they should, creating a backlog of shadow inventory that will need to be dealt with sooner or later. Article #4 on the aforementioned list claims that 2011 saw prices level off, which has positioned the market for a turnaround in 2012. Just look at the chart. Does it appear leveled-off to you?
In the spirit of fairness, the pendulum does swing both ways. This gloomy article here claims we aren’t even halfway finished working through troubled loans and inventory, and the market is looking at possibly another decade of sorrow.
So would-be buyers out there have a tough task in sorting through all of the reports and making sense of the housing picture with regards to values. Here’s three quick tips when considering home values:
- Although ultimately governed by something bigger, each local market is unique, and requires unique consideration.
- Each market is affected in some way by foreclosures, and understanding the local foreclosure pipeline will help one to better understand future market and value behavior.
- Some online news sources simply want visitors to read what they put out, and possibly click on a sponsored link here and there, while others want visitors to do something more, be it to buy now, sell much later, etc. Understanding the interests behind a news source will help to put their analysis and advice into perspective.
Would-be buyers must remember of course that price is just one piece of the housing puzzle, and often times a smaller one that one thinks. Yes, in some markets values will continue to fall, so why would one ever buy in such conditions? What if the perfect house comes on the market at an affordable price? What about the notion that buyers can spend as long as they like shopping for that perfect home, given the lack of urgency placed on them by the market?
Surprisingly, relatively little thought is given to these aspects, the idea that buyers could actually get what they want in today’s market, as opposed to settling for whatever they can get their hands on. Unfortunately, they haven’t made many charts and graphs for people buying the home they always wanted. Perhaps they should, and spend more time touting the virtues of buyer satisfaction as opposed to claiming values are on the rise when the reality is something different altogether.