June’s Existing Home Sales reported weaker than expected and dropped from prior levels, according to the National Association of REALTORS

Because our country (A) loves to discuss real estate, and (B) loves statistical headlines, expect tomorrow’s newspapers to emblazon one (or both) of these data points on the front page:

  • Home sales are down 3.8% from May 2007
  • Home sales plummet 11.4% from one year ago

Those are two of the negative points from the NAR report

There were positives in the report as well, but they’ll likely get buried deep in the newspaper coverage.

For example, homes are more affordable today than they were a year ago.  Mortgage rates for “A” paper home buyers (i.e. strong income, assets and/or credit rating) are slightly lower today in June 2006. 

Additionally. the number of homes on the market dropped in June which led to, in part, an increase in the median home sale price.

We bring the up today because it’s important to remember that real estate is not a national news story — it’s hyper-local.  That’s why newspaper headlines need to be taken with a grain of salt.

Your home is a part of your neighborhood and that has its own “real estate market”.  Just like on any street in America, your street has good buys and outright lemons listed for sale.  What’s happening on the national scene has absolutely nothing to do with what’s happening in your backyard.

Unfortunately, this is a truth that remains largely untold. 

Prospective pool of buyers can be frightened by negative headlines like the ones we’ll likely see tomorrow morning.  Fewer buyers means less demand for homes, placing additional downward pressure on the housing market.

______________________________________________

Tony Gallegos – Serving the mortgage needs of Kennesaw, Marietta, Roswell, Smyrna, Powder Springs, Dallas, Acworth, Woodstock, Douglasville, Hiram, Austell and Atlanta. Subscribe to The Mortgage Cicerone:

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2 thoughts on “Why You Should Approach Existing Home Sales Headlines With Some Skepticism

  1. You hit the nail on the head! The newspaper is scaring everyone about the real estate market here in Ohio. But there are homes selling, most of them within 96-99% of the listing price. Probably one of the hardest things to overcome right now is that sellers who bought with 100% financing are now trying to sell with no equity and buyers are trying to buy with no money down. There is a lot of people buying and selling with no money in their pockets.

  2. Love2SellHouses – I wish the media would to their homework, however, I guess being factual does not sell newspapers or viewership. I constantly have discussions with relatives and friends who point out media stories that are blown out of proportion.

    Yet, your problem with customers selling or buying with 100% loan products is a real problem. Thanks for visiting.

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