Steve Brown’s Pain Comes In The Nick Of Time
My husband just called and told me to copy and laminate Steve Brown’s Real Estate Report in today’s DMN. (Our neighborhood values, he says, have declined almost 30%.) Why laminate? Because next Friday, the Dallas County Appraisal District will be mailing out thousands of notices of valuation on all our properties. My sources tell me they are going to have to enlarge the parking down at DCAD offices: it’s going to be a bloodbath. As for Browns’ reporting, he’s right on: what’s moving, if anything, are first time home buyers in starter homes — less than $100,000 to $300,000, spurred by the $8000 first time home buyer credit. (Stay tuned.) Homes above $500,000 to $2.5 million are sitting. Cannot move. Cannot get loans unless you have near perfect credit (”Nothing less than 620,” says Barbara Meager at Granite Mortgage) and big time equity. (Credit scores are the new SAT.) But what Steve didn’t tell you is that over the $2.5 to $3 million dollar mark, the mega homes are moving under the radar, off MLS, as I’ve told you on this blog and elsewhere.
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I’m going to try to be professional and not lose my reserved and collected veneer as I write this. What that other publication is focusing on are number of sales. That is the worst way to come up with a comparative market analysis for your home.
According to NTREIS (Local MLS):
In the first quarter of 2009 (January 1 – March 31), there were 70 sales (single family only; there were more sales but that didn’t include condos, townhomes, etc.). The lowest price was $67,000 and the highest price was undisclosed but the home was on the market for $11.5M.
In the first quarter of 2008 (January 1 – March 31), there were 97 sales (single family only; there were more sales but that didn’t include condos, townhomes, etc.). The lowest price was $242,500 and the highest price was undisclosed but the home was on the market for $10.5M.
Anyone with half a brain would tell you that if you used those statistics to determine the price that you should put your home on the market for or what your home’s value should be, you would be doing yourself a horrible disservice.
A little off topic, but a FICO score of 620 is nowhere NEAR “perfect credit”. The highest FICO score that you can obtain is an 850. A 620 is very average and is considered a “medium” risk. I wouldn’t label any cut off below 750 as “near perfect”.
Just a thought….
(forgot to mention that those numbers were only for Area 11 which is the area between Northwest Hwy, LBJ, 75, and Midway)
The median price stat is probably the most misunderstood and misused pricing indicator. Especially since we have such a diverse housing product. I think the only thing we can conclude from this stat is confirmation that the credit market and economy is affecting the high-end market. However, it’s difficult to even support that with such a limited statistic and limited sample, as you’ve stated.