Is My Math Wrong? Or Is This Negative Sensationalism?

I just read this article on CNNMoney. It talks about the "housing implosion" and how the Case/Shiller Home Price Index is predicting a continued price drop in 75 of the 100 markets in their list. OK, sounds pretty bad and, in fact, being in the business we see some of the worst of it first hand.

But take a bit of a closer look at the table they present. Notice the second column. That number is the price appreciation experienced over the last 5 years. Only 2 of them are negative and the vast majority are far higher than the last column - which is the predicted price change from '08 to '09. In other words, even in markets where prices are predicted to drop most homeowners are better off than they were 5 years ago.

Take Philadelphia as an example. The median home price is $200,000. That represents a 50% increase from 5 years ago. So, 5 years ago the median was $133,333. Even if Case/Shiller is correct and prices drop 11.1% in 2009, that will make the median $177,800. This is still 33% higher than 5 years ago.

Now, I am not trying to say there is no housing crisis. We all know there is a huge amount of pain being experienced all across the country in this industry. Look at Detroit, for example. Not only did they lose 6.3% over the last 5 years, but they are predicted to lose another 8% in 2009. There are plenty of examples like this, but not as many as the headline writers would lead us to believe.

My question is this: why isn't the headline "Median Price Up 33% In 6 Years!"? Wait, I think I know. That would not sell as many papers.