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July 28th, 2009 7:11 AM by David W. Welch
My dad used to say figures lie and liars figure. I don't know that he made that up, and I don't mean to call anyone a liar. I do want to point out how the same numbers can be used two different ways to make very different points. DISCLAIMER: My blog is RealEstateOptimist.com, so I tend to see the glass half full. Bad news sells papers, so the media tend to report...bad news. Last night on the ABC evening news the government report on new home sales was actually reported in a positive light, as it should be in my opinion. Sales in June were up 12% year over year. The exact same report showed little change in sales compared with May, so the Orlando Sentinel reported "US New Home Sales Flat".
It has been my experience that there is a positive side to many situations. The bible says that God uses everything for good; I just can't always see it. I do believe that there are some good things going on in the real estate market right now. Since prices in Orlando have dropped to half of their highs of 2005 and 2006, affordability is through the roof here. The combination of lower prices and lower interest rates has pushed our affordability to the highest levels I have ever seen. In May the affordability index reported by the Orlando Regional Realtor Association was nearly 200. An affordability index of 100 would indicate the median wage earner can afford the median priced home. At 200 the same median wage earner can afford two median priced homes. June's prices went up slightly as did the interest rates, so the index dropped into the 180 range, but that is still 40 to 50 basis points higher than what we have typically seen in Orlando.
Thank you ABC news for the positive report last night.
Orlando Real Estate, David Welch Real Estate Optimist