Media Dropping Ball on Housing-Market Trends
Again, they have labeled our market as a "buyers" market and reported that more foreclosures are on the way. The problem I have with both those statements is that
- they are created out of data provided by the real estate industry; and
- they are accurate, but not truly reflective.
The real estate industry is its worst enemy when it comes to reporting sales data to the media and, ergo, the public. The reporters call, asking for the latest sales information and that's exactly what we hand them, latest solds, the houses that actually settled in the last month.
Then the media take that report and extrapolate a trend (in their minds) of what's going to happen in the local markets. The problem is they are usually wrong. The Journal's report is a good example. While they are reporting that the Washington, D.C. market has a 6.4 months supply (considered a normal to buyer market) any agent working the Washington suburbs will tell you that is far from the truth. We are sitting on hardly any inventory and in many of our pocket markets, we have just a few days' supply, much less weeks.
Split it up by price range, and some communities have less than 7 days' supply. The houses come on and sell in a day at or above listing price. The challenge for the media (or something they refuse to really look at) is that when they go to these "local" MLS organizations that serve a particular metropolitan area, they just lump it all in the same bowl and come out with one large biscuit and label it Chicago; or Washington, DC; or Big City Name here.
If you know the geography of Washington DC, then you'll probably be a little confused when you find out what's included in our MLS: Parts of Pennsylvania, Delaware and West Virginia. If those areas are included, then, yes, the DC market has a 6.4 months' supply.
In Pennsylvania there's an absorption rate of 13.5 months currently. In W.Va., it's a 10.8 months' supply and in Delaware, those good people have a 12.7 months' supply.
Right around the Beltway, however, which is DC-proper, the absorption rate is at 2.8 months. (That would be only Active properties, divided by pending sales written in the last 30 days). A buyer can see all the homes in their price range in about 15 minutes because there just aren't enough houses on the market.
So when the consumers around Washington (or Miami, Chicago, New York, etc.) read about the months' supply on Hagerty's Quarterly Housing Report in the Wall Street Journal – what's an agent to do? Who's the buyer going to believe – the Wall Street Journal, or the agent driving them around trying to sell them a house and earn a commission.
I mean, hey, what would the agent know? They just look at me as a big fat commission check, right? The market is turning in many metropolitan areas around the country – DC is at the head of the curve and many will follow. (In fact, at this writing, foreclosures make up only 18 percent of Fairfax County – one of the larges suburban markets in the DC area – 82% are regular sales.) But before you swallow the charts from the Big Media about absorption rates, talk with the agent who's actually working the area.
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