The US National Association of Realtors released their 2007 Q2 data on existing home sales and here are some of the highlights of their press release:
"Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 5.91 million units in the second quarter, down 10.8 percent from a 6.63 million-unit pace in the second quarter of 2006."
"The national median existing single-family home price was $223,800 in the second quarter, down 1.5 percent from the second quarter of 2006 when the median price was $227,100. The median is a typical market price where half of the homes sold for more and half sold for less, but there has been a downward skew in the national comparison because sales have declined in many high-cost areas and risen in some lower cost markets."
"The median existing single-family home price in the West was $349,400 in the second quarter, down 0.4 percent from a year ago."
I am having trouble with even bothering with the median house price data and determining how useful it is. The median can be moved quite drastically by the sales mix. For example, if a lot of high priced home sell but very few low priced homes sell then the median would obviously be higher. The opposite can also be true.
Ideally, I would prefer a benchmark index like the REBGV or FVREB uses or even better would be a house price index like the Case-Shiller index which uses the repeat sales method for calculating price changes in a real estate market.
Nevertheless, we have this data and it has some use, however limited it may be.
7 comments:
Here is a repost of my earlier post/rant/diatribe on the NAR q2 numbers (from condoinfo):
Ok, so the NAR q2 numbers are out, and as expected they are perpetuating their usual fraud on the public.
Median prices were up yoy in 97 out of 150 metro areas. That of course means that 53 out of 150 had declining prices.
Here is how Lereah's replacement spun it: Although home prices are relatively flat, more metro areas are showing price gains with general improvement since bottoming-out in the fourth quarter of 2006,
What he of course knows but fails to mention, is that the median is horribly skewed due to the collapse of the low end. Apples for apples measures such as Case-Shiller are clearly yoy negative.
And buried deeper in the report we get this:
The national median existing single-family home price was $223,800 in the second quarter, down 1.5 percent from the second quarter of 2006 when the median price was $227,100.
What do you know, the aggregate median is down. But they chose to highlight the 97 out of 150 are up.
And then the spinner in chief (the president) buts in with:
Unlike stocks, where significant equity can vaporize overnight, there is little volatility in home prices, and most homeowners are experiencing very healthy long-term gains,” she said.
Oh you forget about leverage and foreclosure, Lady Huckster. WTF does "healthy long term" gains do for some chump who is in over his head? Especially since your own boy Lerah spun and mislead all the way.
The costs of construction trends up from one year to the next, so even in areas that experience price declines, owners who maintain their property generally retain most of the equity that has built-up in their homes over time.
Shut the f*ck up. Did they do a round table brainstorm for pathetic non sequiturs?
While local conditions vary greatly, a typical owner who bought six years ago is seeing a 45 percent increase in the value of their home. Even so, it isn’t valid to directly compare homeownership with stocks. Although a home is normally a long-term appreciating asset, it is primarily shelter – most owners sell when their needs change, not when the market turns,
Oh pleeeze. Clearly contrived talking points designed to counter anticipated criticisms. What a bunch of desperate excuses. I have never had much good to say about the NAR, but this time these assclowns are spinning one deception too many.
An analysis of all available data over the past six years shows almost every market experienced price gains from the second quarter of 2001 to the second quarter of this year.
So what? I am sure Nasdaq did great between 1997 and 2000. It is the future that matters you pathetic clowns.
And as I also posted, NAR median has San Francisco up 7.8% whereas Case-Shiller has it down 3.4%.
We know that the quality adjusted figures are more accurate, so I think it is criminal to go on about rising prices when they know full well that apples for apples house are down.
Oh, one more thing. Last time you posted the REGV median it was significantly higher. Was that just a blip due to sales mix?
How about you tell us how you really feel freako!?!
I bit my tongue when I was writing that post because it makes me want to barf when I hear the mindless garbage coming from these industry hacks. If they were held to the same level of accountability for their statements as public company executives, David Lereah would be well on his way to jail right now.
Good question about the numbers. Since the REBGV does not release median price statistics, in my analysis of the Q1 data I used the average SFH price (less a 10% correction and adjusted for exchange rate) published in the March release. Subsequently, I did some research on some different markets in the US and our market here and found that the average was not a fair comparison to the US median data so I have adopted the benchmark price (adjusted for currency exchange) as the comparison. It may be a little low, -5% or so, but I feel it is more accurate measure that comes closer to approximating our median.
I don't have the same problem with the FVREB stats. They publish the average, median and benchmarks.
How about you tell us how you really feel freako!?!
If I did, surely the establishment would dust off some ancient anti obscenity law and throw me in the clink.
Encouragngly many US markets experienced YOY price increases 2 years into theUS RE bubble bust. So if we bust nation wide, oh-tommorrow- Vancouver could still be experiencing YOY increases 2 years from now-assuming we follow the US.
Encouragngly many US markets experienced YOY price increases 2 years into theUS RE bubble bust.
Jimbo, did you miss the part about the median skewing prices. Quality adjusted Case-Shiller is down down down. As is the simple size adjusted median.
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