Housing Doom Housing Bubble Blog

Yesterday, Jay Butler of the newly renamed Realty Studies at Arizona State University’s Polytechnic campus released his monthly report for December.  Phoenix, like Las Vegas, has rolled back the clock with its falling median home prices.  December’s median price was $255,900, 2% lower than the $260,000 figure for December 2005.  It was also the lowest median price since July 2005.  As many sellers now are offering various incentives to buyers, these incentives can keep the median price artificially high.  Median home price can also be a reflection of the type of properties purchased, and does not always represent same house appreciation. Here’s the appreciation graph: (figures not adjusted for inflation)

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DataQuick is a popular source for tracking the California housing market, and their numbers are widely used and quoted.  As we’ve been considering the effects of faulty MLS data on the market, I received an interesting email from SD.  SD points out that DataQuick has its issues as well–one of which is their definition of a sold property.  SD states:

You are not going to believe this!  I live in Shasta County, California.  The local newspaper, the Redding Record Searchlight publishes addresses and dollar amounts of sales each month.  Their source is DataQuick. 
 
On a lark, I decided to track foreclosures for their impact on sales.  The Record Searchlight publishes "Notices of Trustees Sales" (potential foreclosures) in the legal section of the paper.  When the lender gets the property back (foreclosure) a "Trustees Deed" is issued .   I found FORECLOSURES being counted as SALES.
 
DataQuick does not distinguish "Deeds" (regular property transfer)  from "Trustee Deeds" (foreclosure).  These are counted together as sales.  Yes, that is correct, FORECLOSURES, are counted as sales.  For Shasta County 141 sales were reported for November, of those 12 were foreclosures [8.5%]. That means that in reality there were 129 sales.
 
Data Quick did not respond to my email.  The Record Searchlight contacted DataQuick.  Data Quick indicated their program,"Prospect Finder Farm Services", has NO function to distinguish Deeds from Trustees Deeds (foreclosures) and it would be expensive to fix this gross error.
 
Bottom Line:  The inclusion of foreclosures means that ALL CALIFORNIA SALES ARE OVERSTATED BY DATA QUICK.
 
Here are a couple of  foreclosure examples which you can check on zillow.com. Zillow is doing the same thing as DataQuick.
 

• 1025 Chardonnay Walk, Redding, CA 96001 shows sold $635,000 on 11/17/06.  (Foreclosure currently on the market with Coldwell Banker for $520,000,  listed as a lender owned property.)

• 6740 Southgate Drive, Redding, CA  96001 shows sold $249,474 on 11/13/06.  (Foreclosure currently on the market with Bears Den Real Estate, listed as a lender owned property for $213,000).

 
This must also be happening in Nevada and Arizona.

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