In the Tri-Cities, we are on pace to see a 5% rise in prices and sales numbers very similar to 2008 and 2009 - which were considered very strong Real Estate Markets (Rivaling Historical Best Numbers).

Another example of playing with numbers to create a story:

 It’s been widely reported that as many as one in four homes is underwater. Moody’s Economy.com pegs the problem at 30 percent. Both numbers make headlines but it appears that neither represents reality.

According to the U.S. Census Bureau, as of 2009, one-third of all owner-occupied homes have no mortgage. So last month when CoreLogic reported that 22.5 percent of mortgaged homes had negative equity the reality was that only 15 percent of all homes were underwater.

 Past the headlines the Journal article went on to explain how the statistical methodology inflates the number making it appear worse than actual reality. What?!?

“Everyone likes to get headlines, so they tend to overstate problems like this, without doing ground-level research,” says Kenneth Rosen, chairman of the University of California, Berkeley, Fisher Center for Real Estate and Urban Economics.What do you know, the exception to the rule: an economist with half a brain. 

Sadly, that’s how the media works. Be sensational or get lost in the noise. The truth be darn. And economic data is not immune.

 So what  is the reality?

According to the author of this article, professor, entrepreneur, radio and TV commentator, Tony Paradiso - for mortgaged homes, 49 out of 100 homeowners owe less than 75 percent of the value of their homes. Twenty-four out of 100 owe between 75 and 95 percent. Excellent: 73 percent of mortgaged homeowners are in good shape. An additional 4 out of 100 owe 100 to 105 percent.

Statistically and practically, this group poses no problem. Basically, there are three problem groups. These include those who owe between 105 and 110 percent, 110 to 125 percent, and more than 125 percent of their home’s value. In total, these groups account for only 19 percent of all homeowners. This is already lower than the advertised negative equity number. However, now we must adjust for the margin of error. Conservatively, we can assume that approximately half of those who owe less than 125 percent of their home’s value actually belong in the “no problem” group.

Applying this final adjustment yields a number that more closely represents the actual magnitude of the problem. And that number is in the neighborhood of 10 percent of all homeowners in the Nation and far less in our own Market in Tri-Cities, Washington.

Not great, but certainly more encouraging than what the experts would have us believe. Again, proving that Real Estate is local and you need to get your advice from a Trusted Realtor - Not the Media.