When North Bethany, DE Real Estate Watchers Google Sales Gains
North Bethany, DE real estate observers who Googled ‘existing home sales’ on Friday would have encountered a valuable reminder of how statistics can be true—but nonetheless misleading. National media reports had uniformly reported strong results from the residential housing market—but North Bethany, DE readers looking for more precise details found headlines that let them (as the mind-reading tricksters used to say) “Pick a number--any number.”
Google’s screen-topping “Top Stories” boxes displayed Friday’s leading ‘existing home sales’ entries like this:
· “Existing home sales jump 25 percent in July, continue record pace” -Woodworking Network
· “Insatiable demand drives July pending home sales up 15% annually” – HousingWire
· “Pending Home Sales Rise 5.9% in July” – PR Newswire
The three top stories illustrate something that North Bethany, DE real estate followers have come to learn: that glancing at top-line summaries—especially when they contain statistics—can be more misleading than informative.
On Friday, if you were looking to find out how ‘existing home sales’ are doing (as opposed to ‘new homes’ or ‘all homes’), the Woodworking Network reported an extremely strong showing. Sales had jumped 25% in July—but ‘jumped’ compared with what? The answer came from the National Association of Realtors®: compared with July sales the previous year.
The HousingWire story also had July activity growing, but only by 15%. That report was accurate, too—but it wasn’t about sales per se—it dealt with “pending” home sales, which count the number of signed contracts. Since these are generated a month or two before the actual sales are finalized and counted, the numbers are quite different.
But how to explain the third story? It, too, reported on a rise in July’s pending sales—but by only 5.9%! The discrepancy could be found in the NAR press release (which turns out to be the source of all three of Google’s Top Stories). The smaller number registered the growth from the previous month, rather than the same month a year earlier.
BTW, CNBC’s Diana Olick weighed in with (rather than 25% or 15% or 5.9%) “Existing home sales up 8.7% versus a year ago.” Good show, Ms. Olick—you didn’t have to read further: that headline said it all!
- Written by Jimmie Bachand
Rehoboth Beach, DE Residential Questions Meet the Summer Silly Season
This year may go into the history books as the one that sprang more surprises and turnarounds—including unparalleled disruptions and resumptions in Rehoboth Beach, DE residential commerce —than ever before. Amidst a financial world recovering from the steepest nosedive since the Great Depression, followed by the steepest single-month rebound in history, you might think that the real estate commentators would double down to bring readers their most penetrating analyses and prognostications.
But keep in mind that August is journalism’s traditional Silly Season. It’s also the end of the month, when reporters, editors, and publishers are most likely to abandon ship for a few weeks. It’s been an exhausting year for them, too, so it shouldn’t be surprising if at least some of the airwaves and news columns deliver the traditional less-than-compelling space fillers.
Against this background, last week, realtor.com tackled an inquiry that readers seeking guidance for their Rehoboth Beach, DE residential real estate endeavors would not have found in other seasons. Its headline posed the quandaries under investigation: “Why Did J. Lo and A-Rod Pick a $40 Million Mansion on Star Island? Is it Only for Stars?”
Disappointingly, the answers unearthed to these two of the summer’s least burning real estate questions were less than conclusive.
One example was how “perhaps” preceded some of the answers: for instance, “Perhaps that’s what attracted the power couple.” The “that” was the fact that the seller had “renovated and expanded the home to make it even grander.”
Even more speculative was, “it’s unclear if they’re just playing the real estate odds, or if they actually fell for the area…” Unclear, too, was whether the markdown of the single-acre estate (lowered from last year’s asking price of $65 million to $39,950,000) might lend credibility to another speculation: “It could be that home-flipping is their new pastime.”
As for the second question posed in the probe’s headline—“Is it [Star Island] Only for Stars?” the answer is maybe. Or maybe not. The artificial island was built by the Army in 1922, and for sure, stars (Shaquille O’Neal, Sean Combs, Gloria Estefan, among others) are in residence. But there are also regular, run-of-the-mill non-stars who happen to have the millions to spend for a residence with “quick and easy access to Miami Beach, the airport, and the best restaurants in South Beach.” It turns out that the sale isn’t even final, so the answers to either mystery may not be forthcoming, even after the editors return to their posts.
- Written by Jimmie Bachand
What Bethany Beach, DE Refinance Decision Costs in the Long Run?
“This is so very wrong,” wrote leading personal finance adviser Suze Orman last week. She was blogging about what she considers a major error being made by homeowners currently arranging mortgage refinances.
Her point should be of more than passing interest to local homeowners contemplating their own Bethany Beach, DE refinances. With Freddie Mac’s Chief Economist confirming that “rates remain near record lows,” it reemphasizes how Bethany Beach, DE refinance rates are creating bargains many local homeowners are finding hard to resist. Moneywise.com chimed in last week, noting how 30-year fixed-rate mortgages “are more than an entire percentage point below where they were last year at this time.” It was also how mortgage data firm Black Knight could calculate that 16.3 million U.S. mortgage holders could “save nearly $3,400 per year by refinancing at today’s rates.”
So, what prompted Ms. Orman to send up the red flag—the “huge mistake” that most mortgage refinancers make?
Her point was aimed at the natural inclination to replace a higher-interest 30-year mortgage with another 30-year loan at the lower rate—a simple choice that can inadvertently result in much higher interest costs. Bethany Beach, DE homeowners who refinance after a few years of paying down their original mortgage wind up extending the payments by an equal number years if they sign up for another 30-year term. The monthly payments will reflect notable savings in the monthly cash flow—but the seemingly economical move will ring up a higher total interest paid. According to Orman, by the time the mortgage is paid in full, that total can be “much higher.”
Her rule of thumb is to adjust the term of the refi to “never extend your total payback period past 30 years.” The monthly payment will be higher—but will still reflect the savings realized by today’s low rates. Another plus: shorter-term loans carry lower rates.
- Written by Jimmie Bachand