Your House Isn’t Selling? Blame the Hartford Courant
January 25, 2008
The Hartford Courant has been waging a campaign against you - home sellers. They want to scare off anyone thinking about buying your home. Why? I can only speculate that the worse it gets for you, the more they get to write sensational headlines.
How can I make such a claim? Your honor, allow me to present my evidence.
Since the beginning of the year, they have written 7 stories (maybe more) about the housing market with a negative focus. This doesn’t include articles about mortgages, home builders, foreclosures, subprime, recession etc - just housing prices. So, just about every four days, there is one negative article about housing prices.
Realtors Group Sees Flat Sales in ‘08, January 8, 2008
Home Sales Drop Sharply, January 9, 2008
Market Pulse, January 13, 2008
Report Stirs Fears About Area’s Housing Market, January 15, 2008
Biggest Decline in Home Sales Since 1982, January 25, 2008
No Consensus on Housing Market, January 6, 2008
I could find some fault with most of these articles but this next one is the worst.
Truth About Home Prices, January 20, 2008
This article really gets me in just how irresponsible it is. The premise is that seller incentives, cash to buyers at closing for closing costs or repairs, are skewing the overall sales prices in CT.
It’s impossible to tell how much seller incentives and givebacks affect those numbers. But cash givebacks of even $2,000 to $5,000, if they are typical across the board, could skew the overall sales price data by 1 to 3 percent.
Could is the operative word. I could be a super model. I could drive a BMW. I could be living in an Italian villa with a wealthy, suave man named Carlo whose mission in life is to buy me diamond jewelry and make sure my wine glass is always full.
I’m a facts kinda girl, I went directly into the MLS. Out of the 7309 single family sales I counted in Hartford County in 2007, 1829 of the closed sales had seller concessions. That’s 25% of the market.
Of that 25%, the average seller concession was $5400 (I actually think most concessions are lower than this but there were a few sales last year where the concessions were either really off the chart or input incorrectly). The average sale price of the home in my report was $248,000.
25% of the market may have sales prices skewed higher by 2%. I’m not a math genius but that doesn’t appear to be significant. Even if prices were skewed by 2%, the average sales price in Hartford county rose 2.44% from 2006 to 2007.
What accounts for the extra .44%?
All those million dollar home sales in Hartford County? Nope. There were exactly 164 sales over $1 Million in 2006 and only 74 in 2007.
The theory that seller concessions are having a significant impact on real estate prices is based on Zero. Nada. Zip.
One step further, I would argue that seller concessions have very little effect on the market overall because most agents, when doing a Comparative Market Analysis for a buyer’s offer, take concessions into account and tell their buyers. So, when Buyer A buys House A and gets $2500 in closing costs and pays $200,000, Buyer B knows that the seller actually walked away with $197,500 and will plan his/her offer on House B accordingly.
The interesting thing is that the author could have called any REALTOR® in CT or the Greater Hartford Association of Realtors and obtained this information within 10-15 minutes. Instead, she used some anecdotal evidence to fit the great headline - the Truth About Home Prices.
So, my only conclusion is that there is some other agenda here. What’s your verdict?
Entry Filed under: Buying a House, Connecticut, Real Estate Market, Selling a House. .
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1. Rick Schwartz | January 26, 2008 at 12:58 pm
I couldn’t agree with you more, except to say that Courant is only the tip of the iceberg.
I recently had a letter to the editor of mine published in the Bethel Beacon. The letter was actually a thank you to the Beacon for an actual, fair and balanced article on the housing market in Bethel - stating that while prices were droppiing, the number of houses selling was pretty level.
My beef is with the national media pundits who get off on scaring people out of buying houses for the sake of ratings. It works like this - they make an inflammatory statement like “Don’t you DARE buy a house - Don’t you DARE even think about buying a house”
Then, what happens that the public, listens to them os 30 or 45 days later the same pundit declares - “See I told you the market is bad - no one is buying a house - Aren’t I genius?”
It really pains me, as a Realtor to see people scared away for no reason. There certainly are people who should NOT buy a house in this economy but every situation is different and there a ton of folks who should be buying but, instead, they are ‘waiting out the market”. As they wait for everyone else’s house to go down in value - their own house is also depriciating so, exactly what have they gained?
Shame on the media - shame on the media. I think it was a Spiderman movie where they said ‘With power goes responsibility. The media has a great power to influence the public but they don’t seem to care about the effects of what they do, as long as they get readership and ratings.
2. Your House Isn’t Se&hellip | January 26, 2008 at 6:58 pm
[...] 26, 2008 I didn’t think I would have more to say on the issue of the Hartford Courant’s reporting of the housing market but I was [...]
3. berealct | January 26, 2008 at 7:07 pm
I think most reporters do care. I just think it’s a paternalistic sort of caring, like they need to protect all the helpless people out there who aren’t smart enough to make their own decisions. In a sick way, they may think that by reporting on how “bad” the market is, they are helping people. Problem is, it isn’t true and it shows how out of touch they are.
4. Deborah Laemmerhirt | January 28, 2008 at 7:09 pm
My conclusion is that the media writes to sell papers. So…drama takes over. I agree with Rick Schwartz (above), this is the tip of the iceberg.
The reality is that this is a great time to buy a home for most people.
• The mortgage rates are STILL at an all time low.
• Homes are priced right.
• Sellers are motivated.
Most advice from financial advisors is that the time to iget the best deal is to invest in an area when everyone else is not. SO IF YOU’RE IN THE MARKET FOR A HOME or a real estate investment this is the time. Don’t wait until the rates start going up because they are not going to come back down for a while.
5. Kara Phadael | February 1, 2008 at 2:17 pm
I couldn’t agree with you more. I keep saying, if people would stop watching the news and buy the homes they’re currently wanting to buy but are afraid to. We wouldn’t have to worry about a recession. Nothing seems to spur growth like the real estate market. When people buy homes, they spend so much more time at retail stores buying new stuff for their new homes. That puts retail employees to work, manufacturers to work, shipping companies to work, never mind us realtors, we know how it affects us. Pretty soon, employers can’t find enough good employs- which also should help with immigration issues- if we could just get them legal.
And of course, if buyers started buying, sellers would be able to sell and the price of homes would come back up, but I don’t think tremendously.
Getting people to start buying homes is the best medicine for this country. Just be careful about what kind of mortgage you’re getting.
6. Real Estate Chocolate - Ridgefield, CT Real Estate | February 2, 2008 at 1:35 pm
Jessica, I see you’ve got a tough “mind set battle” with the Courant.
Here on the other side of Connecticut in Ridgefield, our local rag actually has a Realtor writing the articles. He includes statistics whenever possible to give an unbiased snapshot of market activity.
We still have to paddle upstream against the national media, but the paper that most RIdgefielders read and trust is for the most part working hard to tell the truth about our LOCAL market.
Your hard work is appreciated. Thanks.
7. Funny | February 6, 2008 at 9:28 pm
Maybe you should look to the fact that buyers are staying away as an actual indication of the health of the market rather than as a secondary effect of negative media coverage.
I am a potential buyer who is staying away because prices are still way too high across the board. I think it’s great that some sellers are willing to negotiate, but from the looks of their asking prices, they are starting from an entirely unreasonable position. It is not worth it to try to negotiate with someone who is advertising to the world that he is unreasonable.
The fact of the matter is that prices went up too much, too fast and they need to come down. They have not come down nearly enough yet to make buying attractive. You can rent a comparable house for far less that the cost of owning, with no risk of lost capital. So rather than trying to negotiate with unreasonable sellers, I am simply renewing my lease for another year until asking prices soften up some more (does any serious person really believe they won’t). Hopefully by the end of 2008, sellers will start to wake up a bit.
8. berealct | February 6, 2008 at 11:21 pm
IFunny, I totally agree with you that it’s about time we were in a more balanced market. Prices have been too high, making it hard for first time buyers to get in. You’ve made the personal decision not to buy and I can’t disagree.
My problem is the Hartford Courant is inaccurate - they are not researching data that is easily available in lieu of creating headlines. As an example, see my comments about the notion that seller concessions are artificially inflating home prices. Simply false.
What is keeping home prices high is that sellers don’t have to sell, have enough equity to wait it out and there are enough buyers out there to keep the market moving. This isn’t true everywhere or in all price ranges but in some areas, it’s a strong sellers market. The Courant won’t report that!
9. admin | March 31, 2008 at 11:57 pm
Don’t blame the the paper. Blame the bankers, ALL media sources, Realtors and everything in the food chain. Don’t be naive!
Every night the news spews the same crud, and every day you see it in print and while you drive you listen to it etc…
So why are you blaming the Courant?
All markets are cyclical and right now we are going through what will amount to a 4-6 year down cycle after 7 great years.
Thats the way the cookie crumbles.
10. berealct | April 1, 2008 at 10:54 am
The Courant is responsible for its content, right? So, if their content is misleading or blatantly false, isn’t it my duty to expose that? Because they’re the only game intown, they get away with agenda based news and I have real problem with it.
I have no problem with a declining market. It’s time prices adjusted although I feel very sorry for people who were counting on their home equity.
11. Your House Isn’t Se&hellip | May 28, 2008 at 5:20 pm
[...] didn’t think I would have more to say on the issue of the Hartford Courant’s reporting of the housing market but I was wrong. I’d like to add a few [...]
12. Steve | June 22, 2008 at 10:57 pm
I LOVE this…don’t like the message..blame the messenger. as one of those who you sem to think goes out of the ay to “skew” the news (although I don’t work for the Courant) let me help you out a little:
1. We don’t have agendas….we just tell you what we see and know.
2. Your math is bad. You report 25% of homes had concessions. You then suggest the $5400 average represents 2% of the selling cost. You neglect to correctly factor in the original asking price vs. the actually selling price in your overall “effect” calculations. The 2% concession was probably only the last step.
3. I am always amazed that British real estate agents get a 3% commission and think it more than adequate while Americans grumble at 5.5%.
4. Sakles will rebound when the financail industry gets its collective act together. In the interim the houses that will sell (outside fo forclosure) will be the ones correctly priced.
5. The courant’s reporting is right on target…what misses the mark is your hope for skewed reporting.
Have a nice day.