An article by SmartMoney.com's Donald Luskin points out some important news items that seem to be neglected by nearly everyone in the media. Indicators are showing real sign of a real estate market recovery. Here's an excerpt or click here for the entire article.
"I haven't seen a single media story that reported the truth: that the median price of an existing home rose in June. It went up. It was higher."
"Let me be perfectly clear. The median existing home price was higher in June than it was in May, rising to $215,100 from $208,600. Oh, and while we're at it, the price was higher in May than it was in April. And guess what: It was higher in April than it was in March. And hey, while we're at it, it was higher in March than it was in February."
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4 comments:
Maybe no one takes Mr. Luskin seriously because the NAR itself says in its footnotes: "The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns." How could Don -- or you -- not be aware of that?
It depends on what you're looking for. First of all, median prices are just one factor to consider when looking at trends, but I have to disagree that year-to-year are the only meaningful statistics. If you want know what's happening now, you can look at the monthly numbers to see if the prices are moving up or down. For the last three or four months, the numbers have moved up.
Steve:
Don Luskin -- in the story you cited -- was looking at median home prices. That was his argument -- a month-to-month increase in median home prices was being overlooked by the media. The NAR itself says month-to-month changes are not valid because they do not account for seasonality.
I never said that year-to-year are the "only meaningful statistics." However, if you're looking at median prices, the NAR says YoY is the only valid way to do so. None of this is rocket science. Some data are meaningful sequentially, other data only year-to-year.
Don Luskin was manipulating data to suit his agenda. I have a problem when folks do that.
Month-to-month values can be just as meaningful as year-to-year. It's all a matter of perspective. If you are looking for immediate trends, then a month-to-month analysis can be extremely revealing. Whereas, if you are looking more long-term, then year-to-year is what you should be looking at.
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