Raw data is…well…raw data and that means if you misread the numbers, read them with bias, or even read them in a vacuum, it’s easy to misconstrue any sort of research. Home sales stats are no different and this realization is one of the driving factors in the renovation of Virginia’s home sales report.

VAR has now formed a strategic partnership with GMU’s Office of Housing Policy Research that adds additional value and context to its home sales reports. The main aim of the partnership is to produce more in depth quarterly accounts of Virginia home sales that view the state’s housing situation from a chronologically broader and more analytical viewpoint, improving on the snapshot analysis that was the former focus of monthly reports. The new report format now includes not only raw data from local associations, but also

• A look at both national and state markets
• Statistics on job growth and other important economic indicators
• Housing affordability analysis and
• Honest interpretation of the facts

In addition to reinventing the report format, VAR and GMU have also renovated its distribution. Members and the general public can still download reports online, however now media have the opportunity to call in and get an in-person perspective from Virginia’s REALTOR(r) leaders and expert researchers.

The Virginia 2008 first quarter home sales report is now available online and its most important messages are implicit: Perspective is critically important and considering context is crucial.

A Few Highlights…

If you’re looking at national stats, recession is likely. If you zoom into Virginia, our economy has continually outperformed the nation, is still experiencing job growth, and these factors and the diversity of industry across the state contribute to a healthy economic outlook.

Nationally households with an average income can afford 47 percent of homes on the market. When you zoom into Virginia you see households with an average income can afford 50-60 percent of homes on the market.

Nationally and in Virginia prices are dropping and in most areas stabilizing. In both cases, this is contributing to an overall housing affordability increase and created market entry opportunities for a new sect of savvy buyers.

It’s no secret that home prices in Northern Virginia are expected to continue to decrease; however, that’s only half the story. In Prince William, one of the hardest hit areas; pending sales have increased from 1,645 in the first quarter of 2007 to 2,341 in the first quarter of 2008. This isn’t surprising with interest rate decreasing and price stabilization, it seems like prospective homeowners are starting to get the message. Now IS a great time to buy.

No one knows exactly what the next stage will be in the life of the imaginary “national” housing market and its also true that unlike 2004-06 not just anyone can be successful in real estate. But for the smart buyers, sellers, and REALTORS(r), there’s a lot of opportunity for wealth building and Virginia is still one of the best places to be in real estate in the nation.

Don’t take my word for it; check out the good, the bad, and the real Virginia perspective on the housing market at www.VARealtor.com/HomeSalesReport today.

> This from the Chicago Trib: Should you buy or should you hold off?

> This from Inman: Realtors question Web site name restrictions, about concerns some are raising about a new Code of Ethics standard of practice that says REALTORS shall not “use URLs or domain names that present less than a true picture.” The new SOP, approved last November, is the result of the use, by some members, of domain names that suggest that the REALTOR is actually the MLS (for instance, a broker whose website is “VirginiaMLS.com”). Seems to me such usages are misleading at best…and therefore the new NAR SOP is appropriate. Or in other words, just because it’s legal and you own it doesn’t mean it’s ethical. What do you think?

Admittedly, our National Association has been taken a beating of late for its adjusting and re-adjusting (and re-re-adjusting) of its 2007 homes sales forecasts. That, along with the seeming “It’s Always Sunny in Real Estate” spin that many critics read into the latest iteration of its public awareness initiative, have gotten us to the point that many in the press and the RE.net are questioning NAR’s credibility, both as a distiller of housing industry economic data and a truth teller when it comes to what’s really in consumers’ best interests in today’s real estate markets.

While NAR (or VAR either, for that matter) is not above criticism, there are always (at least) two sides to every story. There are even multiple facets to the same story. And there are certainly multiple ways of collecting and analyzing data, and multiple, sometimes contradictory, conclusions that can be drawn from that analysis. I’ll not belabor the point, except to say this: In particular, I believe that NAR’s Chief Economist Lawrence Yun has gotten a bad rap for what some see as his too-rosy forecasts and well-spun public comments about the health of the real estate economy.

Thankfully, he now has a new platform for explaining himself and the inner workings of NAR’s econometrics, and it’s worth a read. It’s not a blog (yet), but NAR has begun to post commentaries by Yun at realtor.org behind the “research” tab. In particular, his recent post on some of the reasons for divergent home price trends is a spin-free, must-read.

I’m glad Lawrence is finding his voice. He’s a fresh, thoughtful, truth-telling asset to NAR. Would that more in the media (and, yes, the real estate blogosphere) were as thoughtful.

Now if they’d just turn his commentaries into a blog, we could all comment….

(I’m told Lawrence’s commentaries will be posted with some frequency at http://www.realtor.org/research, in case you want to bookmark it.)

Three reasonable facts . . .

1. These days (and perhaps always) consumer confidence plays a large role in the state of the housing market. Many buyers and sellers are fearful that home values are dropping precipitously, or will be soon.
2. Consumer confidence, in many ways, is shaped by the mainstream media — as this is where many Americas get information about the housing market.
3. One of the highly regarded sources of information on the housing market is the Case-Shiller Index, which tracks 20 major markets.

. . . that may be having unreasonable effects . . .

• The markets featured by the Case-Shiller index tend to be in California, Florida and other down markets. This makes the index show price declines, which the media highlight, which scares consumers. As Lawrence Yun states, “This is total distortion of market conditions based on a small selection of falling local metro coverage.”
• A second source of information on the housing market, the Office of Federal Housing Enterprise Oversight (OFHEO), shows 70% of 287 local markets having price increases. Again from Yun, “the OFHEO survey gets far less coverage than the Case-Shiller index. Perhaps the media is intent on looking for sensationalized headlines. After all, the media is in the business of selling news, and more sales can be made with sensationalism. (I have been told by few reporters off-the-record that they are interested in increasing their viewership even if it means putting things out of context.) “
• And perhaps the most unreasonable of all, “Another factor that rarely gets attention is that Dr. Shiller, a Yale professor, has a side business in Chicago. His index is used at the Chicago Mercantile Exchange for hedging housing futures values. The more hedging of bets that occur, the more profits go into Dr. Shiller’s bank account. And more hedging of the bets will take place if people believe there will be a crash in housing values. So naturally he has a financial incentive to “scare” the market.”

The entire article from Lawrence Yun is definitely worth reading — and it is great to see NAR bringing these facts to light.

H/T - Jim Duncan, RealCentralVA.com

First time I’ve heard a reporter actually acknowledge — without being prompted — that the recent downturn in homes sales was preceded by a historic run-up, and that even now, in most places that have experienced a downturn, pricing remains above what it was prior to the 2002-2006 run-up. Yeah, our association leaders have been reminding the media all along, but it’s nice to hear a reporter who “gets it.” (I also think it’s interesting that Schiller’s index only includes 10 cities….)