Good news, then some bad
Fresh on the heels of yesterday's somewhat good news from the Case-Shiller Home Price Index that house prices were up a tad in the Boston area, we have more bad news on the foreclosure front.
Foreclosures more than doubled in Massachusetts during the first half of 2008 when compared with the same period last year, according to a report released today by Warren Group, which publishes real estate data.
There were 6,707 foreclosure deeds recorded in the first half of 2008 -- up 117.6 percent from 3,083 in the same period of 2007. Foreclosure deeds indicate completed foreclosures.
But, lenders filed fewer petitions to foreclose, which is the first step in the whole process, in June. There were only 350 petitions to foreclose filed for the month, down nearly 85 percent from 2,308 filed in June 2007.
That could be a sign that lenders are really trying to work with struggling borrowers before foreclosing on a property and that the right-to-cure law is having an effect. The right-to-cure law took effect in May and it delays the petition process, by requiring lenders to give delinquent borrowers 90 days to pay off loan defaults.
But perhaps I shouldn't be so optimistic.
"Despite the temporary drop-off in foreclosure petitions over the last two months, overall foreclosure activity is consistently climbing. Thousands of homeowners are still at risk of losing their homes this year,"said Timothy Warren, chief executive of the Warren Group.
I'd still take issue with calling yesterday's news good - less bad is not the same as good, even though that is how its being spun.
Oh my lord. I'm afraid I'm giving up on this blog.
I don't know why the month-to-month numbers are being brought up in articles or this blog. This is a perfect example of spin. Yes, the month-to-month numbers for march into April and April into May are up. If this news has taken you buy surprise then you have not done your homework at all. Look at the data from the previous years and you will see that the month-to-month data always increases in the spring. Now, you will see the June Case_Shiller numberes post another increase month-to-month for May into June The peak sales and prices always reach it's peak for the year in June. Then I will bet that the June-to-July numbers will start to drop. Comparing the month-to-month numbers is almost meaningless.
Was the news really that good (if you're for higher home prices) on the Case-Shiller Home Price Index?
Not really. It turns out that the Case-Shiller Index has shown an April-to-May increase in Boston area home prices every single year since 1990. Even more telling? The fact that the May 2008 numbers represent the third straight year - and worst of the current home price declines - in which the May year-to-year numbers show a decline - of nearly 5.8% compared to May 2007 (the May decline from 2005 to 2006 was 1.4%, in 2006 to 2007 it was 5.3%).
In fact, the May to May decline for Boston area home prices according to the Case-Shiller Index is the greatest since the May 1990 to May 1991 time period, when prices declined 10.3%.
Should the headline read "Good news, then some bad"? Or should it avoid assigning qualifiers to news and instead report: "Boston home prices show record 27th straight month of year over year declines"?
Why is the fact that housing prices are increasing a good thing? Boston is still priced much too high.
I am suprised that the Globe did not report "Foreclosures less than California....All is Well"
Typical of the Globes distortion of statistics in line with the Mass Association of Realtors; the Globe reports that prices are up 2 straight months. This is like reporting that the average temperature is up each month from February. Rather than rely on year over year statistics, The LAZY Globe reporters who are fed data from the Realtors, report month over month data.
Shame on the globe. Once a jewel of a paper now just a PennySaver
"...yesterday's somewhat good news from the Case-Shiller Home Price Index that house prices were up a tad in the Boston area..."
Wait a second. I thought "Boston prices at the end of May were down 6.2 percent from the same period last year, according to the [Case-Shiller] index."
What gives?
More to the point, Case-Shiller showed that Boston prices rose 0.8% from April 2007 to May 2007. Was that 'good news'? No. It just meant a lousy May is about 1% better than a lousy April.
My apologies folks, in my haste to post news today, I forgot to mention that I was referencing Kimberly Blanton's story about the Case-Shiller index in today's Globe, as opposed to the previous day's blog post.
Honestly, I assumed that people that read the real estate blog are reading the real estate news elsewhere on the site. Here's a link to Kim's story, in case you didn't see it yet.
Also, you're right, the title was off base. Again, I was in a hurry. My apologies.
I can visit this comment section of the globe every day and see many charges that the paper is in bed with a realtor group or twisting numbers to be negative. It is amazing how no matter what they publish they get the same reactions. The blog commenters should take an opportunity to enlighten us with how they feel about the numbers as opposed to charging the reporter with twisting the story.
If you have a problem with the numbers, which number is more accurate for your taste. Are you a buyer or a seller? I think bad numbers would be good for buyers, but buyers still seem really negative about buying... why?
Anything less than a 10% decline in Median Sales Price year over year is a good correction in my opinion. Month to month numbers are meaningless unless they are compared over several years changes.
Interest rates remain low with the threat to be rising. If you are a buyer, you can expect the market to continue a decline, but what are you waiting for?? As long as you stay a few years, you are set. There are great FHA programs with low down payments, keep looking for these government incentives to buy a foreclosure, snag one of these short sales, etc, etc, etc.
I have a home, so I am sitting tight a few more years, but putting investments on my radar screen. I would recommend that you consider this option in your life plan.
I am a real estate broker and find the reporting of real estate statistics generally confusing for the layperson. Hell, it's sometimes even confusing to me! Some of these reporters, and I'm not singling out Boston Globe reporters, must not've taken a statistics class in college. Sometimes, the explanation of the basis for the statistics are not even explained. I don't necessarily think that The Boston Globe is in bed with The Massachusetts Association of Realtors, I just think that The Boston Globe is looking for eyecatching headlines. Anyway, I am much more wary of the media these days than I ever have been in the past. Take care, Jon
This blogger might want to review your comment before posting it.
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