Comments on: Statistics can be stupid.

By: Greg Broadbent

Greg Broadbent — Mon, 19 May 2008 11:55:45 +0000

You really can make statistics tell you anything. I think just looking at the total # of houses that sold will tell you something. I don’t know about your market but we have years worth of inventory on the market and until most of them sell we wont truly know what the total effect has been. In my market the “problem” houses just are not selling at all. That could be the bottom 1/3 of houses, or the difference between 05 and 07.

By: Sven

Sven — Sat, 17 May 2008 09:17:36 +0000

I’m with Kris on this one. There are some signs of life, but there was also another record-setting month of foreclosures last month. Those houses still have to be listed, drag down their neighbor’s property values, get an obnoxious yellow and black sign in their front yard, go through 3 price reductions, and then finally end up in someone’s lap.

It’s like waiting for the cable guy to show up… these things take time. Just make sure you are around between 9 and 6 for the next year. One thing to keep in mind is that with each price reduction for a sector of houses, there’s going to be a pocket of latent demand that will suddenly spring into action. If the supply grows in a sector faster than the demand, it will put pressure on the sectors near it. At the end of this journey, we all get to buy nicer houses for less money. Isn’t that sweet?

By: Kris Berg

Kris Berg — Sat, 17 May 2008 03:20:39 +0000

Phil - Day on market! Don’t get me started again. The best DOM stat, IMO, is for listings, but we know this one still falls far short of reality because of churning.

Smithers - Missed ya! The pic (thank you for noticing) is cropped from a group shot - the now infamous food drive. I am without make-up, in a dirty T-shirt, and wearing sunglasses on my head. It sort of captured the essence, though. More importantly, don’t mistake me for a bubble baby. Things are showing signs of turning the corner, but I just hate it when the wrong message is sent. Our market is still declining. Period.

KB and Faina - Yes indeed. Manipulating numbers for a particular purpose is not a new phenomenon. Unfortunately, when the stats are misrepresented, my clients get confused. This makes me angry, and you don’t want to make me angry.

By: Faina Sechzer

Faina Sechzer — Sat, 17 May 2008 01:59:10 +0000

Kris, real estate statistics are only meaningful if one understands the underlying data. In Princeton DOM was down 57% in April, compared to March. Does it mean houses are selling like pan cakes? No. There was a simple explanation, but usually consumers don’t get those explanations. My recent posts were all about explaining what the data really means. I am not sure how many agents dig that deep. The press usually doesn’t.

By: Kevin Boer

Kevin Boer — Fri, 16 May 2008 23:42:29 +0000

Lies, damn lies, statistics…and then there are real estate statistics as interpreted by journalists.

By: Smithers

Smithers — Fri, 16 May 2008 21:07:11 +0000

Kris,

Excellent post. Dare I say, almost “bubble-blog speak” (calm down; no worries; just “almost”; not actual). Same with Phil’s comment.

By the way, when you say “cooperate”, do you mean “pay a commission”? I recall many years ago on one of our FSBOs, we would have various realtors(R) ask if we would “cooperate” with them. (Why wouldn’t we???) Afterwards, this was clarified to mean “would we pay them a commission if they show up with someone who buys the house?” Apparently, it would have been vulgar or the like just to come out and say what they wanted in the first place.

p.s., don’t tell Steve (or Mrs. Smithers), but I like your new picture.

By: Phil Hoover

Phil Hoover — Fri, 16 May 2008 18:22:43 +0000

Kris ~
Great post!
DOM (days on market) stats are also questionable.
Anyone ever stop to realize that those stats only apply IF the home sells?
In the Boise area, fewer than 1 in 10 listings are selling each month, meaning that the other 9 never make into the DOM stat.
Then, there’s the fact that average and median prices are comprised of the MIX of homes that sold.
If a bunch of higher-priced homes sell in a given time period, those numbers move up.
And, if a bunch of lower-priced homes sell in a given time period, it looks like prices tanked.
Numbers are simply an indicator; not the gospel truth.