Tuesday, August 15, 2006

If It Bleeds, It Leads

Okay, this one just stuck in my craw, so I’m going to hit it here and let you finish tearing it apart.

Headline: Home Prices in Deep Freeze!

Actual data from paragraph 2 of the article itself: Nationally, the median home price rose just 3.7 percent to $227,500 from last year's second quarter to this year's, according to the National Association of Realtors.

The “just”, for the uninitiated, is called “editorializing”. The rest of the sentence is fine. Let’s do some very brief math, shall we?

4 quarters in a year. 3.7% growth per quarter. Let’s see, that’s…carry the 2…add the other thingy… 14.1% annualized growth in housing prices for 2006.

Poll question: Your home rises in value by 14.1% this year. You think:

  1. Kachinnng!
  2. Solid. Better than I’m getting at the credit union.
  3. A little disappointing. We’ve been seeing 45% (this is for those in Vegas and San Diego)
  4. HOME PRICES ARE IN A DEEP FREEZE!

If you answered d), then please navigate elsewhere on the World Wide Web right this minute.

Sigh. This is the stuff we have to deal with here. Still, it’s better than politics, where this is the sort of thing one has to guard against six times an afternoon.

The rest of the moderately interesting article is here. Also note that although things are not so rosy in Danville, Ill (-11%, worst in the nation), the increase in Baton Rouge, LA (+27.3%) is almost 2.5x higher than the worst drop. This is typical. Bull markets average significantly greater gains than bear markets average losses, which is why smart people stay in the game.

Statistical disclaimer: nothing in the national statistics tells us anything about what YOUR home is doing. For that, call a professional. We know a good one.