When It Comes to Real Estate: Bad News or Ridiculous Expectations?
If you listen, watch, or read the news, even the local news, you are typically bombarded with "bad news" when it comes to Real Estate. But is it really bad news or merely ridiculous expectations?
If you talk to the average Houstonian, they will likely tell you there is a real slump in Real Estate. "The prices of homes are going down," "the number of sales are decreasing," "the average days on the market is growing," etc. They likely developed such a view from their local news. But what do the real numbers say?
Well the Houston Chronicle, which has itself gotten on the bad news bandwagon, had a graph in its Sunday (October 1, 2006), Business section that paints a different picture.
What is the median home price? It went from $144,000 in August of '05 to $152,000 in August of '06. A solid 5.6% increase in the last year. Better than most people have enjoyed from other investments and this is one that people can actually use and not merely collect on at a later date.
What is the number of sales? Sales have grown from 6,661 in '05 to 7,052 in '06. Again, a respectable increase. In some fields this would be called a growth industry.
The only one that has received a little softness is in the average number of days a home stays on the market. It has increased from 70 to 75, certainly not enough to indicate a shaky market.
As I have stated before, that some people are going to be negative about the economy no matter what. But it appears obvious to me that expectations, not real prosperity, is the real problem.
If you talk to the average Houstonian, they will likely tell you there is a real slump in Real Estate. "The prices of homes are going down," "the number of sales are decreasing," "the average days on the market is growing," etc. They likely developed such a view from their local news. But what do the real numbers say?
Well the Houston Chronicle, which has itself gotten on the bad news bandwagon, had a graph in its Sunday (October 1, 2006), Business section that paints a different picture.
What is the median home price? It went from $144,000 in August of '05 to $152,000 in August of '06. A solid 5.6% increase in the last year. Better than most people have enjoyed from other investments and this is one that people can actually use and not merely collect on at a later date.
What is the number of sales? Sales have grown from 6,661 in '05 to 7,052 in '06. Again, a respectable increase. In some fields this would be called a growth industry.
The only one that has received a little softness is in the average number of days a home stays on the market. It has increased from 70 to 75, certainly not enough to indicate a shaky market.
As I have stated before, that some people are going to be negative about the economy no matter what. But it appears obvious to me that expectations, not real prosperity, is the real problem.
posted by Kevin Price at 9:41 AM
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