Each month, both the Massachusetts Association of Realtors and The Warren Group (Banker & Tradesman’s parent company) put out dueling press releases measuring the state of the local housing market. Inevitably, The Warren Group’s gets better play in the media.

It’s not that MAR and The Warren Group’s research differs significantly. MAR tracks properties sold through multiple listing systems. The Warren Group tracks all property records filed at registries of deeds across the commonwealth. The Warren Group’s data is therefore more complete, and it includes data on more properties. But the trends shown by both data sets are usually in synch. There’s not much disagreement about what direction the market is moving, nor even by how much.

MAR’s press releases get less play simply because they seem to be shilling, rather than reporting. Last month, for example, both organizations noted steep declines in January sales and median prices. But MAR’s monthly housing report didn’t lead with that. Instead, it led with the theme that the housing market is an absolutely fantastic place to be for first-time homebuyers. “Housing Market Hits a Triple for First Time Homebuyers,” MAR headlined its press release. “Affordable prices, low mortgage rates and $8000 tax credit create unique opportunity.”

Then MAR acknowledged that its own stats show home sales dropped 12 percent in January while condo sales plunged 26 percent. It eventually noted that median home prices fell nearly 18 percent in the month, and that condo prices had crashed 26 percent. “The January median selling price for condominiums is back to 2003 levels,” MAR trumpeted, as though this was a home run.

Ironically, it might well be. MAR is not wrong that this is a good market for people who are looking for a home to buy – the operative word being “home.” For consumers who want just the right property – the gingerbread Victorian, or the classic Federal – this is clearly a great time to be shopping. There are properties available, and they’re probably more affordable now than they have been in years, at least in terms of absolute price and mortgage cost.

But the market is clearly still declining. And the economy looks like someone put Stephen King in charge of the Federal Reserve.

There’s a big difference between a market for home buyers, and a market for home speculators. That’s what we’ve had for the past half dozen years: an expectation that what we’re buying is a short-term gold mine that we can live in, not a property whose primary mission is to give us shelter, warmth and comfort.

Clearly, some real estate agents are positioning the market correctly. They’re applauding declining prices (which raises affordability), and are touting the benefits of buying a home, not just buying a house.

But the industry as a whole still seems to want to send both messages. This is a great market for people who want to buy – and you should want to buy because real estate is a great investment when you want to sell. It’s the idea of touting both of those statements at the same time that undercuts the industry’s trustworthiness.

The National Association of Realtors, meanwhile, is running broadcast ads urging people to go home shopping. That’s good. But it tags those ads with the statement that “On average, real estate prices double every ten years.” That is a historically dubious claim, and certainly questionable for the next decade.

Consumers trampled by economic debacle brought on by an overheated real estate market aren’t going to buy the idea that this is the time to get rich in real estate. Tamp down the hype, show the benefits clearly and reasonably, and the Realtor organizations can come out of this looking like leaders.

 

Investment Grade

by Banker & Tradesman time to read: 3 min
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