We’ve been hearing about how the real estate market has hit bottom from a variety of sources, this today from the White House:
WASHINGTON (Reuters) – The U.S. housing market appears to be bottoming out, White House spokesman Robert Gibbs said on Friday after an industry survey showed sales of previously owned U.S. homes jumped 7.2 percent in July.
The White House, meaning your president, is telling you that the market “appears to be bottoming out”. All cheerleaders and media outlets are pushing the positive spin – could it work? Will it work?
Most potential homebuyers who are actively looking at houses aren’t going to read any further – because they are already willing to buy if they can just find the right house.
But will improving headlines cause them pay more for it?
I don’t think so.
The positive spin might get buyers (and definitely sellers) more excited, and bring in from the sidelines some new potential buyers, but I think the spin is a turnoff.
People don’t trust the spin-masters, and they tell themselves that they aren’t going to get fooled. Expect that the majority of potential buyers are going to stand pat, and be more willing to wait, rather than pay too much.
Keep your eye on the better statistics, and ignore anything you read in the mainstream media.
Compare the number of detached listings, and vs. those in some stage of foreclosure:
|Town or Area||Zip Code||ACT||PEND||SOLD July 08/09||F/C List|
We do need to make up some new measuring sticks though.
More foreclosures than actives = trouble?
Foreclosures more than 5x last month’s sales?
Foreclosures in triple digits?
Let’s use 92010 as a guide, because it’s probably been the healthiest of the bunch.
If you have more pendings than actives, Y-O-Y sales are higher, and your foreclosures are about 3x actives, your favorite zip is doing OK.
My baseball coach used to say, don’t believe anything you hear, and only half of what you see!