I regularly read, both in the national media and in blogs here at ActiveRain, about this year's sales and prices versus last year's sales and prices.
For example:
Home sales in May 2009 were 1,347 countywide versus 2,710 in May 2008. The median price in May 2009 was $285,000 whereas it was $355,000 in May 2008, and the average price was $332,000 in May 2009 versus $379,000 in May 2008.
This isn't retail sales, folks. Real estate is completely different from Starbucks comparing sales for this year versus sales for last year. The same people go to Starbucks to buy a nasty cappucino every day or every week. That doesn't happen in real estate. No one is buying a home every day or every week, or even every month, or even every year.
So what's with this bogus statistic?
Would you do the same thing using comps for your listing presentation or purchase offer? Surely not. You're going to use comps from last week, last month, or possibly the last three to six months, but certainly not from a year ago.
History is nice, but I think you need a shorter history for this particular statistic. For example, here in San Diego County:
Home sales have been up or flat for eleven consecutive months, and prices have been up or flat for five consecutive months.
Just because the local and national media do it doesn't mean you should follow their lead. After all, surely you think of yourself as better than the media, no?
Just my take on things as a marketing and business consultant.
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This week's blog posts (they will open in a new window)
It is interesting that our posts providing statistics are some of the most popular. You may not find them interesting but many do. Recent figures are the most important.
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Hey, Lenn - You of all people I thought would not be such a follower.
Hey, Roy - What makes you think I don't find them interesting? Quite the contrary. If I didn't find them interesting, I'm sure I wouldn't have 17 Clients who are Realtors.
I don't follow them. I'm merely explaining to you why so many agents use the year-to-year data. To get monthly data, you have to do come search. Which, of course, I do.
I consider year-to-year data largely useless. I pull monthly and often weekly data from the MLS.
Now that's the Lenn that I've come to know here at ActiveRain.
So do you think it's just laziness on the part of many agents, to copy what the local and national media provides to them without thinking that there really is something better, like weekly or monthly data?
Russel, one reason prices are reported so prevalently now is that some are trying to show just how affordable housing is compared to the past. Now, if the prices continue to go down, many of the fence sitters won't be particularly motivated. My guess is that the first little uptick will result in some movement.
I soooo don't care what is happening any where but where the listing is in our listing presentation and the trick is thanks to the media hype...to get buyers to think the same way...Milwaukee is not San Diego is not Miami is not Houston is not New York is not Seattle is not is not is not...hope Zo remembered Father's Day and shares her catnip.
I post a weekly report of the market. I keep the week columns for the month, then do a short comparison of the previous month. I know weekly reports don't tell me a whole lot, but it gets quite a bit of activity, and I know local people are reading, at least a few of them are.
To be honest, it takes all of about 15 minutes to do the entire post, research, entering it in the table, posting it.
I do not post any other stats from NAR, CAR (CT not CA, LOL) or anyone else. Just my own.
I just had a client ask for the last year of comps to see if she was getting a good value. I ran the comps for the home showing the same time frame (three monthsApril-June 2008) from last year and the comps for three months back this year. Our prices have not dropped but the number of homes old has and the number of days on market has gone up. Last years comps are only useful to get a historical perspective. Thanks for the great post!
I only compare month to month or look at an entire quarter to see if the trend is still downward, has stabilized or is rising. Anyone who has gotten out of bed in the last year in our area knows that prices are down and in some counties WAY down.
I believe that agents either don't have the ability to compute data into information or don't have an MLS system that give them the data in any recoverable use.
Statistics are fascinating to me. That isn't the case with most agents.
Use of national stats is no worse than the government and the NAR uses, so. . . . . .
National stat's are useless for local area's. In fact they just don't apply.
I occasionally use 08 t to 09 stat's for homes listed vs homes sold. It helps (I think) consumers follow the trends and know the amount of inventory. Mostly I like month to month comparisons and trends. Usually the stat's only follow what I already know in my gut based on my teams and my production.
Recent local statistics are definitely more important to the seller or buyer in that area. Year stats can help chart a trend but certainly not price a house for immediate sale. It's people interested in the macro view, I guess.
it's so important to truly understand what's behind the stats - was that a foreclosure or REO property that sold so low. Were the sellers getting a divorce. Where the buyers expencting their second child in a month and desparate to find a home.
Russel, I agree with you and don't understand the logic of year-to-year comparisons in real estate. It's not really an honest assessment, if you ask me! They should compare to 10 years ago, or something else that is more meaningful than "last year".
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I regularly read, both in the national media and in blogs here at ActiveRain, about this year's sales and prices versus last year's sales and prices.
;)
;)
Well, for one thing, it's the way many of our associations and boards report the information.