How much, exactly, were home sales up in January?
January home sale figures came out yesterday morning, but it wasn't until well into the afternoon that I knew what the numbers actually were.
The first set I saw said 25 percent more homes sold compared with a year earlier in the Baltimore metro area. But wait -- elsewhere on the website run by Metropolitan Regional Information Systems' stats arm was an area profile that pegged the increase at 23 percent. So I called for clarification and was eventually shipped over a third set of numbers showing a 15 percent increase.
And the percentage change on that one was calculated wrong.
Oh, my aching head.
The final answer, according to MRIS's RealEstate Business Intelligence, was a 17 percent increase. (Average prices fell 5 percent.)
RealEstate Business Intelligence said it was opening-day glitches after a massive switchover from an old sales-statistics database to a new one, which is slicing the multiple-listing-service numbers in ways we couldn't get at before. Interested in how many homes were snapped up in 10 days or less? Now you can find that out.
"We recalculated everything this month for the past 13 years," said Margaret O'Sullivan, vice president of operations at RBI. "Before, it wasn’t queryable. It was like a big spreadsheet. ... In order to be more dynamic going forward, we had to go through these pains."
One of the differences sharp-eyed readers will notice is that figures for past months have changed.
That's partly because RBI is categorizing things differently: Pending sales with contingencies in the contracts, i.e. "I'll buy your home if I sell mine," are no longer also counted in the active-listing number.
In addition, you'll see that sales totals are higher or, in some cases, lower. Why? Frequently, agents add some sales information to the multiple-listing service after the company takes its monthly statistics snapshot. And sometimes agents take back sales that were recorded in the system in error (or with the wrong date). Now that RealEstate Business Intelligence has recalculated the last 13 years of figures, what you see picks up on all those after-the-fact changes.
December home sales, originally posted as an 8 percent increase over the year, are now showing up as zero change. That makes January's gain the first since the post-tax-credit swoon.
Thoughts on the database switch? Please share.
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Comments
Drop prices another 10% and even more will get sold.
Once they get down to 1999 prices again...
Posted by: MrRational | February 11, 2011 1:18 AM
Thanks for sorting out the data for us. I'll certainly welcome any positive news whatsoever on the housing front!! Thanks again.
Posted by: C. Fromby | February 11, 2011 10:40 AM
If 99 pricing comes expect 7-8% interest rates.
I do think prices have 10-15% to fall in the area. If rates jump to 6% with the drop you're looking at the same monthly payment.
Price point and interest rates hold hands.
Posted by: ironhide196 | February 11, 2011 11:31 AM
I know people often make this argument regarding the fact that a lower price with a higher rate would put you at the same monthly payment as a higher price with a lower rate. But I need someone to explain this to me, maybe I'm wrong.
Wouldn't it be better to buy a house for a low price with a high rate. Thus, in the future if the rate drops, you have equity and you can refinance to the lower rate. Rather than purchase a higher priced house with a low rate. The point being, the mortgage rate can change, but the purchase price of your house will not. You're stuck with it no matter what.
This is why I have a hard time swallowing that sales pitch from real estate agents. If it's the same price regardless, I'd rather purchase the cheaper house. When it's time to sell, you won't be convincing a buyer of the sweet low mortgage rate you got. You'll be trying to convince them to pay enough for your house so, at the very least, you can break even. And let's face it, most of us want to make a profit.
Posted by: Kimmie | February 11, 2011 1:13 PM
Kimmie,
It depends on how long you will be in the house as well. People talk about "30 year mortgages," but most people either A) Don't live in the house that long or B) Refinance at some point for whatever reason (low rate, need equity for an expense, etc).
Do a search online for an mortgage amortization calculator. You can plug in the sales price, interest rate and term, and it will show you the payment, the interest paid, and the loan balance over the course of the loan. That can help illustrate which option is right for your situation.
You could buy at 5% now, or wait a year and buy at a 10% lower price, but interest rates may be 6%. If you can't refinance while you live there, how long you live there can decide whether now or waiting makes more sense. Most people are only in their first homes for 5-7 years, for example.
For the record, I am a Realtor, but not one of the ones who says that somehow right now is both a great time to buy AND a great time to sell. :)
Posted by: John K. | February 11, 2011 1:52 PM
Kimmie: you are correct.
The "payment" is a shorthand measure to describe affordability and manage budgets for those inclined to or who have no choice but to finance major purchases... but not actually purchase anything in the process.
This is why advertising for cars hide in tiny print the actual purchase price. The dealers (and makers and banks et al) don't really want you to buy your car or to even think of it in those terms. They want you to commit to a monthly payment FOR THE REST OF YOUR LIFE. Same with housing.
Sign up for an X and use it (or live in it) AND MAKE PAYMENTS ON IT for a few years and then trade in or over or up to different X (or a Y) and then MAKE PAYMENTS ON THAT for a few years... and so on.
You'll never get ahead.
Find a car and a house you can afford to buy with cash you have saved in advance or AT BEST with a loan that you can afford to pay off within a reasonable time relative to your use of it.
For a car that's 30-36 months to be followed by another 30-36 months of use where you SAVE that payment amount up and for a home that's a 15-20 year amortization followed by remaining in that paid for home for another 15-20 years.
If this means you have to buy a Hyundai or a rowhome rather than a Mercedes or a Colonial... so be it.
Posted by: MrRational | February 11, 2011 3:31 PM
According to Reality Trac, Baltimore had a 70% decrease in foreclosures, compared to January 2010. That is a very positive sign.
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