What the Media Isn't Reporting About Our Housing Market

The media helps keep us informed about the world we live in. They tell us what is going on globally, what our government is up to and on a local level what the weather might be like (even though they bat just over 500 on that one), and they can even tell us the best route home when there’s traffic. We trust the media to give us accurate information and they have a duty to ensure that it is. But what about the stories they just choose not to report?

Let’s face it. Bad news sells and the media know it. They also know that sensational news sells and can afford to devote little space or time to reporting “feel good” stories. 

In the real estate industry we are keenly aware of how the media focus on certain issues while choosing not to report others. And when they do report sensational news, often it is fraught with poor investigation—why ruin a good story with the facts?

Such is the case for our local housing news. We’ve been barraged with the doom and gloom stories for the past several years. One might think that when there’s some good news they’d be tempted to reverse their course of tenebrous stories. If the market continues on a course of recovery as it has been doing so far this year (ahem—six months have gone by hello…), they just might be forced  to report the bright side of San Mateo County’s rebounding housing market else be scooped by their competition.

This is our report for June 2011, assessing the housing situation both nationally and locally—comparing the national housing news with our local market. We’re been waiting for the news to break about the staggering median price increase in San Mateo County but alas we are relying on our own reporting to bring you the facts:

Interest rates are reaching 50 year lows again. Rates this week were unchanged. A 30 year fixed rate was hovering around 4.5%. Time to refinance if you haven’t already.

September 30th is the drop dead date for the $729,750 conforming loan cut-off. As of October 1, 2011 it drops down to $625,500. Rumors that Congress may extend the temporary high cost area cap are doubtful.

“The February report to Congress by the Departments of Treasury and Housing and Urban Development (HUD) stated “the Administration recommends that Congress allow the temporary increase in limits that was approved in 2008 to expire as scheduled on October 1, 2011 and revert to the limits established under HERA [Housing and Economic Recovery Act].” As such, we do not expect any further extensions.”

Case-Shiller report for May showed that the U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010.  The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1% versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.  The San Francisco MSA (metropolitan statistical area) which encompasses the counties of San Francisco, San Mateo and Marin fell 5.1% year over year, 2.6% for Q1 ’11 and .1% from March 2011-April 2011.

Meanwhile San Mateo County fared much better. The median home price rose for the fourth straight month in a row—up 15% in Q1 2011 over Q4 2010, up 13.8% over last month, and up 10% over May of 2010. And here’s a staggering statistic which the media has managed to ignore—the median home price in San Mateo County is up 40% since January 2011.

Stabilization appears at hand with more local job driving the demand for housing. San Mateo County home sales were up 14.8% over last month. Don’t compare May home sales to last year—the $8,000 tax incentive skewed the numbers for May and June last year—the drop dead date for the rebate last year—but on a side note, the same number of homes 418, sold last May even with the now expired incentive.

Are buyers jumping in to catch the higher conforming loan limits and pushing up sales/prices? Perhaps. This October’s year over year sales should be a good indicator.

Watch for July’s housing report—the first year-over-year comparison devoid of government incentives.

*Data from the San Mateo County Multiple Listing Service.

Interested in keeping up on Belmont home values visit monthly published stats on our web page: MorganHomes.com

Drew and Christine Morgan are REALTORS® in Belmont, CA employed by RE/MAX Star-Carlmont.

 (650) 508-1441       

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.