CNN Money’s Les Christie has a flashy report out today that Tacoma is one of “10 large metro areas” that will record the biggest housing price gains in 2012.
Specifically he predicts Tacoma home prices will gain 11.8 percent by September of 2012.
While all of us hope for good residential real estate news, it’s unclear how he arrived at that conclusion. The gallery says in very small type at the end that the source of data is “Fiserv, based on cities with a population of 500,000 or more.”
First thought: Tacoma has about 200,000 people; Pierce County has about 800,000. How is he, or Fiserv, defining metro area?
Second thought: Fiserv produces data for the Case-Shiller Index, which is published monthly by Standard & Poor’s. That monthly index for the Seattle area includes Pierce, King and Snohomish counties — that’s a lot of territory. Tacoma- and Pierce County-specific data is often different. We try to drill down on these local areas by using data from the Northwest Multiple Listings Service. Last month, it said the median sales price in Pierce County was $200,000. That’s $40,000 lower than Mr. Christie’s article lists for Tacoma.
Third thought: Mr. Christie also lists Seattle as one of his Top 10 markets. The median home price issue is the same; he lists it as $375,000, but the NWMLS says $333,500 for King County last month.
Final thought, for now: September 2012 is a long way away. Many real estate brokers I talk to aren’t comfortable making predictions for a few months from now, much less more than a year from now.
(Parenthetical personal thought: The CNN story also describes Tacoma as a “mini-Seattle.” Not really, right Gritizens?)
I’ve called Julie Nixon, a spokeswoman for Fiserv’s Case-Shiller indexes, to see if I can shed a little light on what we’re talking about here. Meanwhile, what questions do you have?
Update: As of 4:30 p.m., I haven’t heard from Ms. Nixon. I’ll post more if she calls back this week.
Update, noon Feb. 9: This morning, Brad Fennessy of Fiserv sent a spreadsheet that showed the “Tacoma” they refer to is the Census’s metropolitan area, which covers about 800,000 people. Generally, that’s Pierce County. The spreadsheet has data for about 380 areas across the country.
The spreadsheet has several categories, including two that indicate how the CNN reporter arrived at the 11.8 percent figure. Fiserv has predicted that home prices will decline 0.5 percent between third quarter 2010 and third quarter 2011, then rise 12.3 percent between third quarter 2011 and third quarter 2012.
What I still don’t know is the methodology behind those predictions, nor how Fiserv has arrived at a median home sales price that’s $40,000 less than the NWMLS data. Mr. Fennessy is arranging a phone call with Fiserv’s chief economist. I’ll post more after that.