I just removed last week’s poll and put up a new one. Last week’s results surprised me in that I expected readership to take a gloomier view than they did.
Yesterday, the Oregonian ran a story titled “What can I get $285,000 ?” by Connie Potter. Most of the data is from the latest RMLS market action”. She says:
The median price of a home in April was $285,000, up 5.75 percent over a year ago when the median price was $269,500, according to RMLS data. That means of all the homes sold in March, half sold for more than the median price and half sold for less. Year over year, the median sales price jumped 11.2 percent over the 12-month period ending in April 2007 compared with the same period ending April 2006.
We’ll have to revisit the poll results at the end of the year. In my opinion, if we can get to September with prices up over the previous 12 month period, we’ll see a positive overall 2007 as it was the end of last year where the market started to take a beating.
Last week’s results surprised me in that I expected readership to take a gloomier view than they did.
…ummm… Just about 1/2 of the respondents thought prices would be down anywhere from 5% to over 10% and 22% thought they’d be flat. So something like 2/3 of the respondents thought prices would at best stay flat. Only about a third thought prices would go up any. Doesn’t seem very cheery.
Inventory up another 2.5% last week in PDX according to http://www.housingtracker.net/
They also show prices flat over the last 12 months and down 1.1% over the last month.
Year over year, the median sales price jumped 11.2 percent over the 12-month period ending in April 2007 compared with the same period ending April 2006.
OK, so just to clarify: you’re not saying the prices were up 11.2% between last April and this April, you’re saying that the rate of increase was 11.2% greater than it was the previous year, correct? …sort of the 2nd derivative or something like that…
The surprise was that it wasn’t more negative than it was. The majority comments I see on this blog are the sky is falling and will only get worse…
Year over year, the median sales price jumped 11.2 percent over the 12-month period ending in April 2007 compared with the same period ending April 2006.
That’s a quote from the story, became less obvious as it indented along the picture. I read it as saying that the median price is up 11.2%. If it was $100k last year, it is $112k this year. No smoke and mirrors. I’ll try to make the quote more clear.
In light of rising inventories, and slowing sales, it’s possible that rise in the median price isn’t necessarily a sign of market strength. It stands to reason that the median price is rising because fewer lower-priced homes are selling. This would be due to the sub-prime mortgage business implosion and the tightening of lending standards, both of which most strongly impact buyers of lower-priced homes.
Have to agree with Steve on this one. Starter homes are more difficult to buy than two years ago, thanks to better lending practices.
Vallejo, California (northern part of the Bay Area) is expected to have a very high foreclosure rate due to the subprime crisis. Vallejo was once considered a hot market because it was more affordable than other Bay Area counterparts (Fremont, Oakland, Concord).
Does the Oregonian really give the total picture? The median price may have jumped, but did the total number of sales jump as well? Did the price include “money back” to the buyer in closing costs? Did it give what areas buyers considered “hot”?
Charles, I think Tip has it right. According to the article, the median price increased 5.75%. So if the median price was, say, $269,500 last year, it’s $285,000 this year.
It is a second derivative type test. The rate of change of the rate is being examined. The 11.2% suggests that the increase last year was 5.17%, thus the increase to the median price is going up faster than the year before.
Year-Over-Year is where everyone is playing the number games right now, because Year-To-Year doesn’t look as good. By averaging the median price over the last 12 months (04/06-04/07) and then comparing it to the average median of the previous 12 month period (04/05-04/06) you get bigger numbers.
The 5.75 number is just comparing April 07 to April 06. Which is IMHO the number to care about; the rest to me is fluff.
According to the article, the median price increased 5.75%. [between April ’06 and April ’07]
Last month didn’t we hear that the increase was about 7% (between March ’06 and March ’07)? Most of the increase was in the past (last summer and fall). We’ve been seeing flat to slightly falling prices for a few months now. As the year goes on the YoY growth will continue to look smaller and smaller.
The 5.75% YoY increase number says nothing about more recent increasing inventory. It’s basically looking in the rear-view-mirror.
We also didn’t see the inventory percentages from April. Remember the rosy March inventory posting? What happened to April 2007, and now May 2007?