Be Wary Of Most Opinions On The Housing Market

By
Real Estate Agent with Joe Manausa Real Estate 8508880888

I was helping one of our CENTURY 21 real estate agents explain current market conditions to a customer the other day and I was locked into a debate on current and future trends in the Tallahassee housing market.

This customer is very intelligent and has been a builder in the Tallahassee housing market for many, many years. He expressed that “all of his friends in real estate” believed the market was rebounding and that homes were already starting to appreciate. Obviously, I disagreed.

Like his friends in real estate, I wish the housing market had returned to appreciation, but it is simply not true. This is something that we can (and do) measure. As a matter of fact, this real estate blog and our Tallahassee Real Estate Market Report are dedicated to the study of the Tallahassee housing market and we stay very current on market conditions.

Be Wary Of Most Opinions On The Housing Market

GoodAngelbadDevilThis conversation got me wondering … “why are real estate professionals incorrectly telling him the market is appreciating?” Unless I am missing something, I believe it is for one of two reasons:

  1. They really do not know the current market conditions because it is not something that they study, or
  2. They are not telling him the truth, for one reason or another.

I figured either way, he might want to consider branching out for more information. The fact is, there is an abundant supply of information available that allows us to study the housing market using scientific methodologies. People who need to make major financial decisions should utilize this empirical information to their advantage.

 

Rely On Empirical Evidence In Real Estate

Scientific evidence is considered empirical when it can be observed by many people and all will agree as to what they observed. An example would be reading a thermometer. No matter who observes the thermometer, it still displays the same temperature.

The counterexample to this is physically sensing warmth or coolness. Observer A might sense that a room is warm, while observer B senses that the same room is cool. These observations differ depending on the observer, and are therefore considered subjective. Evidence that is not dependent on the observer (i.e., is objective), that appears the same no matter who observes the evidence, is considered to be empirical evidence.

So using this example, people who want to see the market get better might have a tendency to see the good indicators in the housing market, yet ignore the bad indicators. I suggest that consistent measurement of all of the trends will help us gain the best perspective on the current and future trends in the Tallahassee housing market.

Tallahassee Home Sales Up Longer Than Down

A great look at real empirical evidence can be observed by the trend of home sales in Tallahassee over a long period of time. The real estate graph below shows all of the recorded home sales (even ones that were non-arms-length) from 1992 through August of 2009.

[click to see graphs and real estate forecast…]

Home Sales Advice Predicting Future Home Sales 10 Critical Home Selling Steps Forecasting Home Sales Buy A Short Sale
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Rainmaker
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Kathy Clulow
RE/MAX All-Stars Realty Inc. Brokerage - Uxbridge, ON
Trusted For Experience - Respected For Results

Joe - as always a very informative post ... for your builder there is a saying that I can only recall part of at the moment but it is about only believing half of what you read and very little of what you hear.

Sep 23, 2009 06:29 PM #1
Rainmaker
1,162,383
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Kathy, I agree. Most "statistics" are made up on the spot.

Sep 23, 2009 09:29 PM #2
Rainer
37,160
Jim & Cathy Wood Greater Nashville Area Real Estate
Crye-Leike Realtors, Inc. - Mount Juliet, TN

It's difficult, you don't want to appear "Negative". But, at the same time people should know the truth.

My wife's answer to the question: "How's Real Estate?".

"Well, it could be better".

 

Thanks

Sep 24, 2009 02:23 AM #3
Rainmaker
1,162,383
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Jim and your wife is right!

Sep 25, 2009 01:37 AM #4
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Rainmaker
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Joe Manausa

Tallahassee Real Estate
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