Washington Post is at it again - talking up housing

In the midst of all this terrible news about the housing market, there is the occasional happy story of bidding wars and sellers getting more than their asking price. However, such stories should be greeted with enormous skepticism. Local newspapers have strong vested interests in the real estate market. Advertising revenues has meant that many local news outlets are so deep in the Realtors pockets that they can't see daylight.

The Washington Post is a particularly bad offender. The local housing market is deeply distressed. Yet the Post produces rubbish like the article below.

(Washington Post, May 19, 2007) He and his wife, Rebecca, wanted to sell their three-bedroom townhouse in the Del Ray neighborhood of Alexandria. They paid $430,000 in 2004. They were asking $499,000. Jim and Shane Fagan of Alexandria, shown with 19-month-old daughter Tate, recently got $16,100 more than they asked for their Del Ray townhouse. (By Katherine Frey -- The Washington Post) We were pretty apprehensive," he said. "All through the fall, we had friends in Springfield who couldn't sell their house. We watched the market. We read everything. We were hoping just to break even."

However, after just three days on the market in late March, they had five offers, one for $515,000. "This completely shocked us," he said. In a soft market portrayed so often in bleak terms for home sellers, the Casons are in a minority: sellers who get the asking price or more. Some real estate agents say that, despite key statistics that show the slowest housing market in years, they are seeing cases of multiple bids and rising prices. These seem to be concentrated in close-in neighborhoods including Del Ray, Bethesda and Chevy Chase (both sides of the Maryland-District line) and American University Park in the District.

Real estate agent Jane Fairweather of Coldwell Banker in Bethesda, who said she has had some multiple-bid sales in recent months, said sellers are adjusting prices to reflect a more reasonable market rather than the upward price spiral of previous years.

"I think the market is soft if you don't price it right," she said. "You're now seeing probably 10 to 15 percent of the sellers out there who are going to see multiple contracts.”Two years ago, it was probably 40 to 50 percent of the market that got multiple contracts. And the year before that and the year before that, 60 percent of the market got multiple contracts."

Economists in the Washington area have differing views of what this could mean. Peter Morici, an economist and business professor at the University of Maryland, sees a sign of a healthier market. "It indicates while we don't have a high-volume market, we have a market that has some stability. Fundamentally, [prices] are not a lot lower than they were at the peak," he said.