Granted, the National Association of Realtors (NAR) is a trade organization which will, as trade organizations do, try to put the best face on a bad situation. And granted, part of the press's job is to filter through hype and false sunniness to report the truth of what's really going on.
But that is most emphatically not what the Associated Press did with yesterday's NAR report on the state of the national housing market. Instead, AP failed to report overall statistics in favor of reporting individual metro areas; ignored most of the legitimately good news; ignored an important piece of historical context; and, most importantly, and as has been the case for well over a year in the national business press, emphasized reductions in unit sales while de-emphasizing much smaller reductions in sale prices.
Here are five of the key paragraphs AP's unbylined report ("New data reveal breadth of housing slump"):
Sales of existing homes fell in 45 states during the October-December quarter, with metropolitan areas showing growing weakness, a real estate trade group said Thursday.
The fourth-quarter data from the National Association of Realtors underscore the breadth of the housing market’s slump.
South Dakota was the lone state to show a sales increase. Existing home sales there rose 8.9 percent from the same quarter a year ago. Sales were unchanged in North Dakota. No sales figures were available for Idaho, Indiana and New Hampshire. Sales also fell in Washington, D.C.
Median home prices fell in more than half of the 150 metropolitan areas surveyed. Out of the 77 that experienced declines, 16 showed double-digit percentage drops, the trade group said. The largest price declines were found in Lansing, Mich., Sacramento, Calif., Jackson, Miss. and Riverside, Calif., which posted price declines of 17 to 19 percent.
..... The states suffering the biggest drop in sales in the fourth quarter were Nevada, down 44 percent and Wyoming, down 42 percent. Other states with big declines were New Mexico, down 39 percent, Oregon, down 38 percent and Arizona, down 37.6 percent.
It seems that if it wasn't a double-digit negative number, AP tried mightily not to report it.
Here is some of what AP chose to ignore, straight from the NAR release:
- Regional median sales price drops vs. a year ago -- Midwest, -3.2%; Northeast, -4.8%; South, -5.4%; West, -8.7%; US overall, -5.8%. These numbers are by no means pretty, but they're not nearly as bad as the "scary" unit sales declines.
- The overemphasis on unit sales declines at the expense of information on prices is a significant oversight. It's as if someone tried to tell you that the stock market had a bad day if the indices stayed unchanged but volume dropped by half. Your response would be, "So?" The fact of the matter is that a lot of people are holding onto their homes or, if they are trying to sell but are in no hurry, sticking to their guns on selling price and riding the storm out. Though I don't want to overlook the difficulties of not being able to move when you'd like to (which I don't deny can be a significant hardship in some cases), how is all of this cause for comprehensive alarm?
- Eleven of the 150 metro areas tracked had double-digit home-price gains (yeah, you read that right), including Metro San Jose, CA (+11.2%). 12 more metro areas had price gains of 6% or more. Other unreported increases in reasonably large metro areas include Buffalo-Niagara Falls (+9.1%), Des Moines (+5.6%), NYC-White Plains (+3.6%), Oklahoma City (+8.2%), San Antonio (+7.9%), and (imagine that) San Francisco-Oakland (+5.5%).
- AP totally ignored an important larger-context point made by the NAR, namely that "the typical seller who purchased their home six years ago still saw a very healthy gain. The median increase in value for sellers who purchased that home in the fourth quarter of 2001 is 31.2 percent, and the median home equity accumulation is $49,000." Six years happens to be how long a typical homeowner stays in their home before selling.
At some point, you have to consider the possibility that the reporting on the housing situation is as it is because the business press is determined to convey the impression that the mortgage lending and housing "crises" are nationwide phenomena that require comprehensive, national solutions, when the data show that this clearly isn't the case.
I'm at that point.
Cross-posted at BizzyBlog.com.