Shuffled Off By Buffalo

I started off this new year with some hope that just maybe the real estate market would show signs of life. Yet, by January 10th, I'm already discouraged by what I'm reading. Even worse, those who are doing the discouraging are those who have the power to change the situation - but still are not.

First, the government. The literally millions of current homeowners who owe more on their current mortgages than their home is considered to be worth at the moment COULD be helped by the HARP (Home Affordable Refinance Program) which was supposed to have started in December. It is designed to enable many faithful homeowners who have made their mortgage payments on time and in full despite the decreased value of the property to be able to refinance at a lower rate. However, the word is that this program may not be ready to go until March while the technicalities continue to be reviewed.

Of course, I can understand that a thorough review is needed given the potential billions of dollars riding on this Program. However, I cannot understand why this review wasn't done prior to the HARP program being approved. If there are literally more than two months of worth of technicalities to be reviewed, why weren't they clarified by the government and banking officials prior to this? Design it first and THEN review it?

Perhaps government officials should read news stories such as this one:

http://www.delmarvanow.com/apps/pbcs.dll/article?AID=/20120108/NEWS01/201080303


(The above story is about how the reduction in property values is resulting in lower property
taxes in many areas and how it translates to lower tax revenues for local governments.)

Since the various levels of government supposedly need money almost as much as we as consumers do these days, you would think that government officials would be on top of something that figures to bring in millions of dollars and also stimulate this economy.

Second, there is the "news" that the realty agents keep talking about.

Once again, consumers are being bombarded with negative statistics about the real estate market. Home sales are down compared with prior months and years. This story with more of the same from Buffalo brings my point home:


http://www.buffalonews.com/business/article699629.ece


Frankly, this story is infuriating. "It's the bad economy" is one message. Home sales in 2011 were even worse than from 2010. If this news story was the result of an investigation of the marketplace by a reporter, at least we would know that it is a story with a local angle. Yet, this dose of negativity comes from the Realty Association, which is wholly supported by the area's real estate agents and offices. The same people who are supposed to be paid to SELL those houses.

Even worse, the Realty Association story further reflects the National Association of Realtors' comment that the housing market could be this "bad" for another two years. How does this help to sell homes?

Putting these stories all together, it means that government officials can't get their act together to enact a program that could stimulate the economy. If millions of homeowners can refinance at a lower rate, it significantly lowers the chances of foreclosure down the road. More importantly, many of those "saved" dollars each month would be put back into the economy in the form of retail sales, financial products, and possibly other investments. That could keep some retailers and businesses alive.

Instead, the government needs extra weeks to put their already approved mortgage plan into action? How does this happen?

On top of that, the realty agents who are supposed to be creating home sales are spending their finding negative statistics. Did someone apply force for these Associations to keep putting out the negative and discouraging statistics?

If the people in our government and within the real estate industry who could be making the difference aren't making a 100% effort, those of us who are stalled in our efforts and hampered financially by the current state of real estate need to put the pressure on.

More Negative Publicity For The Home Sales Market

The National Association of Realtors needs to "revise" its home sales figures going back to 2007. Before you get any hope up, remember this is the same organization that seems to constantly flood the media with negative stats about home sales.

Yet, according to today's news, they have revisions. Now the NAR is showing everybody that home sales statistics are actually WORSE going back over 4 years:


http://www.dailyherald.com/article/20111212/business/111219962/


This story indicates that some sales "were counted twice" and adds that it has something to do with the reporting of the Census Bureau.

Sorry, but this story raises more questions than it answers. What on earth does the Census Bureau "reporting" have to do with actual home sales? How did it take four years for this to come out?

Those questions, of course, are in addition to the ones I have been raising for more than two years. I'd still like to know why the NAR continues to release negative home sales statistics at all. My understanding is that this organization represents thousands of realty agents who are in turn representing millions of people who have been looking to sell their home(s) during this market downturn.

Putting out information such as "worse than a year ago" has no bearing on someone's decision whether or not to purchase a home today. That has been bad enough. Now, we're supposed to look the other way when it is revealed that these statistics were not correct, and in fact should have been even worse.

Ouch.

Were Home Sales Statistics Truthful?

It's bad enough how many realty associations and industry organizations are adding fuel to the fire with the barrage of negative home sales statistics in this marketplace.

Now comes word that this might become a credibility issue as well. A Southern California based real estate data firm, CoreLogic, has issued a report claiming that the National Association of Realtors appears to have overstated sales of existing homes by as much as 20% over the past five years.

This puts a double whammy on the recent statistics. Many realty associations have been releasing data showing the drops in home sales with comparative statistics. These, of course, put the various local markets in a bad light. So if it indeed turns out that the earlier statistics (1 year ago, 2 years ago, etc.) were actually inflated, it means that home sales have been sluggish for even longer than these associations would have the public believe.

Now this is close to becoming a credibility issue totally separate from such a struggling market. The NAR shouldn't have to utilize its resources for crisis management while the very market it serves is in a crisis.

It has been too soon since the tragedy in Japan hit for us to realize how that is also another blow to the U.S. real estate market as well. Estimates are already coming that it will take upwards of five years to rebuild Japan. With the technology and innovations which have come from that country, I have to believe that international investors will be ready with funding to make sure it happens. That is funding which might otherwise be put into commercial properties and real estate related investing here in the U.S.

On the other side, think back to the early 90's and the California real estate boom. That "boom" was brought on in part due to overseas investors paying above and beyond the asking prices for upscale and high end homes in both Northern and Southern California. For many Japanese investors, high end homes in California were then a bargain compared with home prices in Japan at that time, even at inflated prices here in the States.

Now, especially with the incredible disaster facing Japan and the world, any such international activity in the United States is out of the question. Another blow to the U.S. market.

As much as I dislike using negative statistics in this marketplace (although I'm not representing a realty association in doing so), this is already showing up.

This past weekend, the Orange County Register (So. California) reported on the total sales for February 2011 as well as the first half of March for "luxury homes" (millions of dollars) in Newport Beach and Laguna Beach totaled: zero. After there were sales during January.

If only the focus could turn to how to get properties sold, instead of what the statistics should show.

Pumping the negatives about home sales again

You probably saw the statistics released today (Dec. 23) that "new home" sales are down for the month of November. From the first moment I learned of this and read the wire service announcement, I was already expecting and starting to read the negative references.

The first national story quotes the Chief Economist of the National Assn. of Home Builders about these "awful" numbers. The story infers that it is a reflection of the federal home buyer tax credit having been extended into April and how it means buyers don't have to "rush".

I'm feeling that by the time you are reading this, you have probably been bombarded with still more gloom and doom stories from the media about this. Hardly anybody will take the time and effort to point out these are "new home" figures. Not everybody is looking for new construction in this day and age. Yet, because of these figures, potentially millions of people will think that the real estate market is going back into the dumps.

Hours earlier, we had all kinds of positive indications. Home sales (or as we now have to say, resales) were acutally UP about 7% for that same month of November. That is a far more important statistic.

But a lot of people who are potential home buyers won't understand the difference. They will either go back to thinking that the real estate market doesn't favor them, or that they can wait until March or April to explore possibily taking advantage of the federal tax credit.

To me, this calls for crisis management. Realty agents can't have their client base thinking that right now is not a good time to buy or sell. If I were a licensed agent, I wouldn't care that this is Xmas week. I'd be calling, sending e-mail alerts, texts, or whatever I do to reach my client base, hopefully by the end of the day today. I'd be letting my database know that statistics released by the Home Builders Association are only for new construction and repeat the National Assn. of Realtors statistics about the increase in home sales for November. Followed by a reminder about the "limited time" left for the federal tax credit. The problem is that very very few of the agents will actually do this.

The key to buying or selling a property and getting the best possible deal is really based on how well (or poorly) you use statistics and information that is available. It's your call.