Every day we scour the leading financial papers in the world trying to determine what reality is. If you were to go by the daily write-ups commentators, they would have you believe that real estates values in this country have bottomed, and are now on the way up. The proof they would offer would be the dramatic increase in sales activity throughout the country. Let's set the record straight by looking at a few vital statistics that will inform the average individual as to what is really going on.
According to the national Association of Realtors they reported in August of 2009 that existing home sales rose in July for the fourth consecutive month. They were up 2.2% from June, the preceding month, and the numbers are adjusted for seasonal purposes. On the face of it, this seems pretty bullish, and that's precisely what they would have you believe, but not so fast. Let's get more in depth, and it become obvious, they are misleading everybody who has an interest in this subject, as they are biased to the bull side.
We looked at a survey which was sponsored by a real estate industry trade periodical called, “Inside Mortgage Finance”. Now this is what the pros read, and the numbers are remarkable different when looked at in detail. They were written in such a way as to inform the professional real estate player but mislead the amateur. The publication found that 36% which is more than a third of all sales involved what they called “non-distressed” properties.
So what does that mean? It means you have to reverse the numbers. If 36% of all real estate sales involve non-distressed properties, than 64% or almost two thirds of all real estate sales involve DISTRESSED PROPERTY SALES. Folks, this also means the vast majority of real estate sales taking place in this country is bottom fishing by ordinary people of properties that are in financial distress. This is not a bull market in real estate under any conditions that we can foresee.
There are more lies taking place. In a footnote to the article, we noted something else that was highly deceptive. Let's just focus on the non-distressed sales for a moment which made up 36% of all real estate sales according to the data. Non-distressed to us means just what it says, non-distressed, or voluntary sales. This is not the case however. The footnotes reveal that when dealing with the non-distressed properties, about 31% of them involved what they termed as “unforced or optional”.
This means that 69% of the so-called non-distressed property sales were “FORCED” for some reason which was not given. Now even the average guy can do math. If you put all the numbers together, it comes down to this. Ten percent, that's right, 10% of all real estate sales in this country for the last several months were what you and I would call the normal sales process, where a seller decides simply to sell his home. The rest were either the result of a foreclosure, banks taking losses, or a forced sale by the seller.
Real estate is still a disaster in this country, and we think it is a multi-year workout at best for it to get back on track. Now here is more information that you need to work with.
Vital Points – You Decide
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Goodbye and good luck