Saturday, June 30, 2012

What Foreclosures? The Imperfect Storm

In today's Miami Herald, a headline trumpets Property Values Rise For The First Time in Years.  Pedro Garcia, the affable Property Appraiser for Miami-Dade County has reported a statistically insignificant variance in the total property value as he, Pedro Garcia and Pedro Garcia alone, calculates the value.   

The innumerate Herald reporter then wrote a breathless story about how property values are rising based on this statistical insignificance, instead of staying flat, as based on Pedro Garcia's dishonest and manipulated data.   

You see, Pedro Garcia, unlike any other property appraiser in the country, ignores the sale prices of foreclosed home.  Just cuts them out of the calculations.   This means that Pedro can cry, "Oh frabjous day, callooh, callay" when his nonsense verse is published by the Miami Herald without question.   

Before you rush out in the heat with that For Sale sign, consider this, one third of the properties in North Bay Village currently listed for sale on Trulia are in some level of foreclosure.  These properties will not only sell for considerably less than their value but you won't know about it.  You'll just wonder why your house is still sitting on the market after six months.   

The real estate interests are of course deeply invested in hiding the truth on foreclosures to keep prices up.  The banks would rather you didn't know.  The municipal and county governments can collect more of your money by claiming your house is worth more than it is.  

All of them win by maintaining this pricing fiction.   

But what does the Herald gain?  A few more ads? Or are they too far gone to even care about reporting?  The Miami Herald was never one of the world's great newspapers but they used to have some pride in getting it right.    

Kevin Vericker
June 30, 2012


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