When making the decision to buy or sell Simi Valley Real Estate, Google typically leads the pack as a resource for Simi Valley homeowners and homebuyers. The sources of information that top these search queries are, news articles, real estate companies/industry and real estate agents.
Last November I wrote out of frustration The Lunatics Have Taken Over The Asylum as another example of how bi-polar the reporting is.
Traditional news - reporters for these sources typically do the best they can with the information they have. However, since journalists rarely are seasoned veterans of the industries they cover, they can only rely on the data they have. While general data is helpful, real estate market data is not general. Volumes of houses sold, affordability and income demographics impact different price ranges of the market differently, therefore in market conditions especially like this, averages and medians are not helpful. It's no secret that the entry-level section of the Simi Valley Real Estate market is reacting far differently than the sub-luxury and luxury home markets.
Real estate companies and the industry - Larger real estate companies and industry publications do a much better job in getting market data to the public, however my industry has shown time after time that its desire to spin the market into recovery outweighs its ability to take the "Joe Friday" approach - "Just the fact Ma'am". As bizarre as the market is reacting and how bleak it appears on the surface, presenting the facts without the spin paints a far more educated picture on how this market has been stabilizing and the advantages of a home purchase now can be for patient persistent buyer.
Real estate agents - Enter the mine field at your own risk, just kidding. Many real estate agents including myself have taken to blogging as an avenue to educate and inform our clients on the market. However, tread carefully as not everyone is cut out to blog. What I mean by this, is that you'll find that the best real estate blogs, providing the richest information for consumers, are being written by people who are far higher on the analytical and pragmatic chart. Not every real estate blogger needs to be a statistician but when you're looking at information presented by agents, ask yourself the question are you being sold or are you being informed? There is a big difference between dealing with a Practitioner and a Carny Barker.
A great example of how all this works is if you look at my main market, Simi Valley Real Estate. My city lies on the border of two large MLS databases. Simi Valley is in Ventura County and more sales activity comes from Los Angeles County to Simi Valley than the other way around. Consider that the large majority of listings are taken by agent members in Ventura County and that any agents from Los Angeles County understanding marketing will make sure their listing data is in the Ventura County system. Why this is important, is that the most complete data on the Simi Valley Real Estate market and Ventura County comes from the Ventura County Regional Data Share System.
Let's look at the same reporting taken from the Terradatum/Clarus reporting system with data provided by the Southland Association of Realtors and data provided from the Ventura County Regional Data Share. Looking at the two charts below we can see how incomplete the information coming from the Los Angeles County side is.
(Terradatum/Clarus is a service provided to the members of the Southland Association of Realtors and the Conejo Simi Moorpark Association of Realtors. While the charts and graphs are useful, there are not definitive. This illustration below will show how important it is to know the data of local markets rather than relying on a perk offered to the membership.)
This first chart comes from the data pulled from the SoCal MLS (Los Angeles). This chart attempts to show the number of homes under contract for Simi Valley real estate.
Now compare the chart above to the chart below. Please note that the same chart provider company (Terradatum/Clarus) calculated these two graphs. Why are they so wildly different? Because puling data from the Los Angeles side is incomplete. TerraDataum/Clarus is obtaining their information from two different sources. it's only natural that the data coming from Ventura County, reporting on Ventura County sales is going to be more accurate and robust than the data being tracked and reported in Los Angeles County.
Just looking at the number of units on the left-hand side of the chart, you can see how much information the Los Angeles County data source is missing.
Now let's look at a compounded problem with data being pulled from two different systems and being inaccurate on top of that. This first chart is what is called the month's supply of inventory pulled from the Los Angeles County system. Even though we will see the differences between the two data streams what is more problematic is that the month supply of inventory that both charts are reporting are inaccurate. To bring anyone up to speed as to how this number is usually calculated, you take the total inventory of available for sale and divide it by the monthly closing average.
The next chart is supplied with data from the Ventura County Regional Data Share.
Here again we have data pulled from the same timeframe in the same city, yet because the information is provided from two different sources the discrepancies are very apparent. Going back to how we calculate the supply I would still like to understand how Clarus has calculated these numbers.
We know that the average number of homes sold each month in 2009 in Simi Valley California was approximately 100. I regularly check the active inventories weekly and in 2009 the averages were approximately 250 total actives per week including single-family detached and the condo/townhome market. Without a calculator, that would indicate a month supply average of approximately 2 1/2 months however, looking at both charts, reporting is showing close to 4 to 5 months inventory until February this year.
This is why you'll see on both my blogs here at ActiveRain and http://www.homebuysblog.com charts that I create in Excel. Real estate is local, data is local and the services that provide us data really only get us started in complex markets like we are seeing today. While the government and the banking industry wade through the mortgage crisis and homeowners are trying to figure out what they're going to do; going hyper-local with data is really the only way to get a pulse on the market. Unfortunately, Traditional sources like Dataquick, newspaper articles and even my industry reporting reports broader trends and regional data.
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