Mohave Daily News ran a front page story entitled “Realtor: It looks like we made it”, which painted a pretty positive picture of the local market. Since I was one of the REALTORS cited in the story (but not quoted), I thought I’d weigh in here.
I hope that’s not too narcissistic to blog about an article that cited me, but here goes..
The story opens:
By all accounts, the real estate market in Bullhead City has finally leveled out from the dramatic highs and lows of the past few years.
The writer, Daniel Callahan, has taken quite an interest in the local real estate market. I think it’s great that he’s covering it regularly. He’s also really careful with stats and fact checking, which I find admirable (being a stat guy myself).
So far so good. He continues:
According to Evan Fuchs of Bullhead Laughlin Realty, that equals 10 consecutive months of year-over-year increases in home sales in Bullhead City. He cautioned, however, that most real estate transactions begin to slow this time of year. The first half of the year, he said, is traditionally when people buy homes. Other Realtors in the area agree.
Yes, that’s true. I wrote just that in my August report for Bullhead City.
Next:
Both Fuchs and Sprague agree that the leveling out of the market is a positive indicator of an increased stability in the BHC market.
I’m not sure if used those exact words, but the market has been headed toward balance all year and that’s a seriously positive indicator. A balanced market is a heck of a lot more stable than what we’ve had for the last couple of years.
Here’s another good point from the article:
While the overall volume of sales has increased, the price of those homes has decreased since this time last year.
I would add that the number of homes sold is up significantly, 25% through August, while the overall volume is up by less than 3%. Bottom line here is that more houses are selling, but they are selling for less. Put another way, more houses are selling because they are selling for less.
Here’s where I start to differ with the other REALTOR in the article:
The decrease in price isn’t necessarily a bad thing, said Sprague, because it allows for homes to be much more affordable for the average Bullhead City resident. She cited an example of a foreclosed home in the Arroyo Vista Estates that had eight offers within a week of coming on the market, some of which were substantially higher than the asking price. This indicates, she said, that the number of homes on the market is falling somewhat because more people were willing to pay more for a home than in months past.
The first part is spot on. The decrease in price isn’t bad for the market. Of course sellers don’t like it, and why would they, but those lower prices are precisely what has gotten the market moving again.
As inventory ballooned to nearly 1400 homes in 2006, buyers sent a clear signal that were not going to pay the prices people were asking for their homes. Three years later, prices are much lower and our inventory is down to 735 homes. This is not pleasant stuff, but it is what it is.
So I would disagree with the idea that it’s because “more people are willing to pay more money than in months past.”
Here’s the part that scares me:
It looks like we made it,” Sprague, “we’re holding our own.
Now I know that these statements might slip out during the course of an interview, and it makes a great headline, but it scares the heck out of me to think what goes through someone’s mind when they read this.
First of all, REALTORS as individuals and as a whole have a bad reputation for “positive spin”, which creates mistrust and skepticism with the public.
Second, it’s way too early in the game to make this sort of proclamation. At least for me.
Yes, we’re doing much better than in recent years.
Yes, we’re moving in a positive direction.
Yes, inventory is down and sales are up.
But we’ve got lots of homeowners out there that are still in deep trouble. People are upside down, losing their houses, trying to compete with foreclosures. I don’t think these people think “we’ve made it.”
When I write or talk about real estate, I do make a point of looking for the positive. I believe in real estate and there are plenty of positives, but what’s most important is that people understand the reality of the market.
That’s why I am so grateful when the paper covers the market in an effort to educate people and get the facts out. Truly I am.
So I’ve got no beef with the writer, the paper, or the other REALTOR.
But when it comes to opinion, I’m entitled to have mine, right?
So here it is:
We have made great strides, but we are not out of the woods and we won’t be until banks stop taking people’s houses.
What do you think?
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