Housing Doom

My blender doesn’t spin as fast as the Arizona Republic did this morning.  This morning’s front page headline "Home Values Rise Despite Slowdown."  [no link provided] According to the Republic: [See also "Experts Divided on Whether Market Will Improve"]

Despite falling prices by year’s end, leftover momentum from the Valley’s housing boom pushed 2006 values above the previous year’s values in almost every city.

Median price increases in Maricopa County ranged from 2% in Higley to 47% in Tonopah.  Only Waddel and Youngtown experienced declines, according to the Republic’s latest Valley Home Values survey.

Contrast this with Jay Butler’s report earlier this week:

Much like the ever-increasing sales activity of the last few years, the rapid improvement in prices has disappeared. The median home price has been very stable at $260,000, which is the same as January, but down from last year’s $265,000.

I rarely "recycle" graphs, but I’m going to make an exception this morning.  Here’s the current Phoenix home price appreciation chart: [data from ARMLS]
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Take the "sold" number from the MLS with a grain of salt.
 
When looking at the data from the MLS, it’s important to remember that the MLS was designed to help agents sell houses, not gather data.  While it is used for data collection, like any database, there are "garbage in-garbage out" issues.  L gives us an example:
 

Suppose you have a listing that will expire in 5 days. The house goes under contract, so you change the status to "pending" with a close of escrow date 45 days later. Then after 10 days the house falls out of escrow.  At that point the seller decides not to sell and doesn’t want to relist.

Does the agent go and  change the status to expired?  I’ve never seen anyone bother.  After all, the MLS isn’t for data collection- it’s to show your listings to other agents.  Why would I or anyone else bother to change the data? Consequently, after 45 days the listing will show as "sold."

If an agent still has time on the listing (say it wouldn’t expire for 80 days) they would go and change the status to "active" with the hopes they could find another buyer.  It’s the expired listings that are most likely to not be updated.

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