Statistical skew drives homes sales panic
By JAMES THORNER, Times Staff Writer
Published January 25, 2008
It's the worst new-home market since 1980. That's right. You heard it everywhere this month.
New-home sales have fallen more steeply than they have in about 30 years. We're leaping back to the future, back to Jimmy Carter Land. Malaise. Cardigan sweaters. Stagflation.
Next thing you know, Miss Lillian will be rising from the grave and Billy Beer will appear in twist-off bottles.
But is the new-home market really that dire? Welcome to the wonderful world of misleading statistics.
It's true that the percentage decline in new-home sales is as sharp as it has been in 30 years. But that doesn't mean total sales have returned to levels unseen since 1980.
Skeptical of the alarming headlines, I pulled new-home sales data for the Tampa Bay area going back almost 40 years.
Guess what? In Pasco County, permits for new homes, a leading indicator as builders pull permits before they break ground, returned in 2007 to 1997 levels. The hard number is about 2,220.
In Hillsborough County, the story was much the same. Hillsborough issued 4,665 permits for single-family homes in 2007. That's about what it was in 1995.
Only in Pinellas County did permit totals fall to levels unmatched in 30 years. But the "crisis" there is largely one of land scarcity. As Florida's most densely populated county, Pinellas has suffered a slow, long-term decline in housing permitting going all the way back to the house and condo construction boom of the early 1970s.
Pinellas home construction has zigged and zagged over the years, but the general thrust in three decades has been downward.
The bitter truth is that home construction really does need to take a long holiday. When trying to digest the more than 41,000 homes for sale on the Tampa Bay market, one shouldn't pour thousands more homes into the pot.
But beware of the numbers/percentage game with home sales. It makes for snazzy headlines, but it's only half the story.
We were sitting atop Mount Everest in 2005. Just because we've fallen off that summit doesn't mean we're stuck in Death Valley.
James Thorner can be reached at thorner@sptimes.com or (813) 226-3313.
Homes prices shrinking
Data released Thursday show Florida's median sales price for existing single-family homes last month was $208,900, down 13 percent from $239,900 a year ago. Among Florida metro areas, Tampa Bay's median sales price dropped to $194,200 in December, down 14 percent from a year earlier. Florida's hardest-hit markets? Punta Gorda, Fort Myers and Fort Pierce-Port St. Lucie.