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When luxury home builder Toll Brothers posted its second-quarter earnings, executive chairman Robert Toll questioned the accuracy of the media's reporting on home prices.
Here's what he said: "We question the recent media headlines announcing that home prices continue to fall. Many studies quoted in the media combine distressed sales data, including foreclosures and short sales, with new and/or non-distressed existing-home sales data. We believe that averaging distressed and non-distressed sales data provides a misleading picture to the public regarding home-price direction.
"In contrast to these reports, we are experiencing flat-to-slightly-increasing pricing in most markets. As consumers better understand that prices are firming, we believe they will gain confidence, which will help release some of the pent-up demand that must be building in the market."
Here is how our readers responded:
“Obviously, Mr. Toll needs a reality check. Blended prices are indeed a true representation of real-time pricing of available housing options for buyers. Certainly Toll Bros' higher-end ‘new’ home offerings may have bottomed from their perspective, but in every market I can imagine, there are very high-quality options for interested buyers -- all at huge discounts, and the market continues to see more homes coming to market. This dynamic will likely be with us for two more years.
“Simply check with County Tax folks to see what upscale properties are being sold at today versus a year ago, and which are now being reassessed at much lower taxable value.”
— Mike Hatfield
“Not to be too cynical, but it has been proven over and over the last several years that this country's news media cannot be trusted. Reporting as front page news a slight increase in GDP, a decline in unemployment benefits sought, home price changes, etc., all supportive to this administration's agenda, only to find out later the real numbers are nowhere near as positive should not be editorially buried in the back pages if even reported. Yes, the media is highly biased (just like its readers), but their bias is never reflected by a balance in an opposite perspective. Our local news, The Tulsa World, is a very liberal, populist, leftist leaning newspaper printed in the ‘reddest’ state as seen in the last general election's numbers -- a liberal print and point being subscribed to by a conservative base.”
— Chris Cole
“Yes, home prices are falling. I live in a great neighborhood (Grand Rapids, Cascade Township, Mich.) in one of the top school districts (Forest Hills Public Schools) in the state. Three years ago, homes were selling within two to three weeks in the $165,000 to $170,000 price range. The home next door has been sitting for two and a half years. I checked on Monday, are they are asking $148,900. And in the past three weeks they had exactly three couples go through. I work from home so I know when they show it. The home is vacant, in move-in condition. Newer white kitchen appliances are included, yet here it sits. There are three other homes for sale in this neighborhood (120 homes). Homes here are not moving even at greatly reduced prices. I was thinking of selling in a year but will have to hold on for at least two years.”
— Don Z.
“Certainly the foreclosed properties are influencing home prices, but my larger concern is the Case-Schiller Price Index that everyone looks at as a 'scientific guide' for home prices. It is nothing more than an average of prices of homes sold in a given time period. It has no bearing on the value of my home or any other. If mostly foreclosed homes sell this month then that index will be down. If we suddenly sell a bunch of upper-end homes, that index will be up.
“Neither tells me anything about my home value or any other. The media needs to qualify the value of this report or stop using it.”
— Gary Allen