Getting Perspective-Take Housing Data In Context To Get The Full Picture.

The news headlines of the last 48 hours are enough to get any consumer rattled. Media outlets across the country are shouting far and wide about a “double dip housing recession” and housing sales that have “plunged 33 percent.”

I think it’s important to put these numbers in context, and help our customers understand that national media headlines are not always reflective of the entire picture of our real estate markets.

Let’s break down a couple of this week’s rather dramatic headlines.

New home sales plummet to record low (CNNMoney.com)

The U.S. Commerce Department reported Wednesday that new home sales declined almost 33 percent from April levels, to a seasonally adjusted rate of 300,000 sold units. Year-over-year, this number represents an 18.3 percent decline in sales.

Here’s what you need to know and communicate to your customers:

This sales report is for new construction homes, not existing homes that have resold. The headline says “new home sales,” for sure, but the media does little to clarify that this report is for new construction sales only.

Further, new construction sales made up only 5 percent of all home sales in May. The vast majority of the market was existing home sales.

Due to the seasonality of home sales, month to month increases or declines are far less pertinent than year-over-year changes.

Housing sales decrease in May, dashing hopes of quick recovery (The Washington Post)

The Washington Post may be located in Long & Foster’s territory, but it’s not necessarily a local publication. This article, and many like it, reported existing home sales figures released this week by the National Association of Realtors. These numbers are reported on a national level.

NAR reported that sales of existing single-family homes, townhouses and condos fell 2.2 percent from April to a seasonally adjusted rate of 5.66 million units in May. On the heels of big sales gains the previous two months, the media positions this number as representing a housing market that lost momentum toward the end of the tax incentive period.

Here’s what you need to know and communicate to your customers:

Sales vary greatly by region—even by county. With the market recovering at different rates—even within the Long & Foster footprint—consumers will increasingly rely on their Long & Foster sales associate to communicate the dynamics of their local market. This is why we launched The Long & Foster Market Minute for more than 100 metro areas we serve. This data is not only local, it’s updated monthly. Share it with your customers to give them the real existing homes sales picture for their region.

Looking at existing home sales in a broader context, year-to-date sales as of May climbed at least 10 percent (tracking right alongside Long & Foster’s sales, as I reported in my last WIN). Further, compared to May of last year, May’s sales were up 19.2 percent. There are definitely some bright spots in these numbers that don’t tend to make the headlines or initial paragraphs of most news reports.

As we expected, the market did see a decline in written contracts in May following the wrap-up of the tax credit period. Much of May's decrease was due to the pull-forward phenomenon we experienced in April.

Behind the headlines.  The news agencies and media are reporting:

1-Big decreases in home sales

2-Housing stats paint a deteriorating housing recovery

3-The housing market is "double dipping"

The facts are:

New home sales (only 5 percent of the market) are down, but existing home sales (95 percent of the market) are up.

Written contracts were down in May, but we projected this with the pull-forward phenomenon caused by the tax credits.

We expect June numbers to get back on track as the market works through the ripple effects of the tax credit.

Keep yourself informed of the real story behind housing data. If you’re informed, you’ll be better equipped to educate your buyers and sellers about what’s really happening in their markets.

Everything we do begins with a real estate transaction and a professional Sales Associate and we recognize and celebrate that fact.