Figures Don't Lie...Liars Figure

Figures Don't Lie...Liars Figure
by John Occhi, Hemet REALTOR

I have been working with the information that I have downloaded from the Hemet MLS, sponsored by the Hemet-San Jacinto Board of Realtors.  The data has represented all of the residential properties listed and sold in each of the 3 Hemet zip codes - 92453, 92544 & 92545.

The first few articles I wrote seemed to be a little off to me, so I have tweaked the data so that the numbers were more realistic to my thinking.  Some of what I was looking at just was not making sense to me.

So, I spent some time excluding a number of listings - those that seemed to be the abnormalities. This is not an unusual practice.  Often times when considering a group of numbers, it is not uncommon to exclude the highest and lowest number, in order to get a more realistic feel of the actual ‘average'.  This is similar to what I have done, except I did not use any precise rules - if a particular listing looked ‘off' to me, I used my professional judgment to exclude it from the records that I would use for analysis.

That's why I called this article what I did - "Figures Don't Lie, Liars Figure".  This was actually a very valuable lesson I learned early in my professional career about looking at and trusting numbers that are reported - more often than not, the entity compiling the data have an agenda and are trying to slant your opinion to their way of thinking, based on ‘what the numbers say".

I am telling you all this, because I don't want to be perceived as a ‘liar', or have a secret agenda I want you to buy into.  Rather, what I am interested in is reporting on a more realistic overview of the typical home, in whatever sub-topic I happen to be discussing.

You see, in Hemet, if you are not aware, we have some very abnormal properties.    There were actually 8 properties sold in both 2005 & 2006 that had over 200,000 square feet of land.  Yes, they had a house attached to the land, but they were sold for development value and probably should not have been included in the residential listings.

Then in 2005, there were 31 homes that did not either have any lot size reported or 871 sq ft.  It turns out these were mostly either mobile homes or condo's - properties I would have excluded if there was a simple way to do so.  (18 more of them in 2006).

There were also a lot of homes that sit on 1 to 10 acres.  Typically, these homes are considered ‘horse property' and have very unique amenities - very different from homes in residential neighborhoods.  These homes were excluded as well (45 in 2005 & 22 in 2006).

So, what I have done is eliminate approximately ½ of 1% of the listings from those that have sold in the past 2 years.  It really is amazing what affect a small number can have on the whole.

Let's look...

The most significant difference came in the comparison of the 92544 zip code.  You see, of the 84 properties I excluded in 2005, 49 of them came from this zip code - and most of them were the larger 1 plus acre properties.

You see, when I was doing my initial analysis, I noticed that homes in the east end of Hemet (zip code 92544) had actually gone down.  Before the exclusion of the larger properties the SOLD price of homes went down from $340,542 in 2005 to $338,883 in 2006 and I knew this had to be wrong.

So, now lets look at some general numbers reflecting the entire City of Hemet as a whole, instead of breaking it down by zip code.

LIST PRICE:  This represents the price a home was being offered for, at the time of the accepted offer.            

SOLD PRICE:  This, of course, represents the actual amount of the contract to purchase the home, as reported to Riverside County, and the basis for the property tax base value.

LOT SIZE:  This is the one criteria that I used to ‘clean-up" my data source, to make the new adjustments.  Again, remember that only ½ of 1% was removed from the original raw data.  Now let's see how it changes...

SQ FT:  This number represents the square footage of the ‘living space' of a home.  Not that we have many basements or attics, but if we did, that space would be excluded.  Also excluded are garages and patio enclosures.  In essence, if the home does not receive heat and air conditioning from the home system, it is NOT included.  Another example of excluded space is a garage conversion.

By making these changes, I am certain you will be able to get a better feel for what has happened in the Hemet Real Estate market over the past two years.  Unless I specifically say otherwise, this ‘scrubbed' data will be what I report on for the series of article that I am preparing, analyzing the Hemet marketplace.

Now have a Blessed Day,

John Occhi, Hemet REALTOR
http://www.johnocchi.com/