Wednesday, May 31, 2006

'Home Sales Soar.' Truth in Advertising?

It depends on what the meaning of the word 'soar' is.

Sacramento: -38%
Central Valley: -33%
California: -21%
San Francisco Bay: -20%*

A reader noticed this billboard in Stockton a few days ago. He also wrote that he's seen this same billboard in the Bay Area. Thanks to the reader for sending this in. (The rusted roof is a nice touch, by the way.) As always, photo submissions are much appreciated.

*April 2006, % Sales volume change from prior year, California Association of Realtors


tom stone said...

well,they are hot air balloons after all.

One-Shot Scot said...

It's obviously a spelling error. The RE/MAX ad should read:

Home Sales Sour

Anonymous said...

To parrot the party line:

Home Sales Balance
Home Sales Level
Home Sales Normalize

Garth Farkley said...

Look at the OFHEO numbers today. Prices fell in fifty-two MSA's last quarter. That's big news in itself.

But then restrict your inquiry to the fify largest MSA's (as defined in the last PMI ERET report.) Prices fell in four of the fifty largest MSA's last quarter. I've listed the 4 areas, the decreases last quarter plus the five year increase. You may have to adjust the text size in Explorer to view this table correctly, or just copy and paste this comment to Excel.

If Sacramento continues steady at this rate, nominal prices would drop about 1% in 2006 (before inflation). But notice which area has the farthest to fall. Sacramento has by far the steepest runup in the last five years. Sac is more than double the increase in Boston, which is often mentioned as the hottest bubble.

Warren-Troy MI...-0.45...18.77
Denver-Aurora CO..-0.35...21.15
Cambridge MA......-0.24...50.3
Sacramento CA.....-0.24...112.23
San Jose CA.......-0.20...45.75

Garth Farkley said...

Correction: Boston is a separate MSA from Cambridge. Each of them is individually included among the 50 largest MSA's as listed by PMI. Prices rose in the Boston MSA rose by .24% in the last quarter and by 50.3% in the last five years.

Spacebär said...

I think that one interpretation of the sign is that they are comparing home sales today not to last month's (or last year's) sales but to a long time ago.

How many homes were sold in California 500 years ago, not many.

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