National Real Estate Stats Can Be Misleading

National Real Estate Stats Can Be Misleading

I avoid getting San Antonio real estate housing market news from television or radio stories because the stories are too general to be of much use. Friends and clients get their news from a number of sources and they often want an explanation of something they read or saw.  Real Estate is local and that is the point that I try to convey to anybody who will talk with me about real estate. I did an earlier post on Media Reports on Real Estate Numbers.

When the meteorologist gives the weather report, they provide a national overview, but then break it down for the region and the local situation.

In a twenty-two minute newscast, I understand reporters cannot get into the depth that would be of true value for those interested inSan Antonio housing information. If you want to really know what is happening in an area, you have to do the work yourself or find a Realtor® who will work with you to help you get the real picture for the area in which you have an interest.

In the earlier post, I produced a chart of current active listings and sales this year by segments according to price. Based on the chart, I observed these three facts:

• Over 50% of the houses sold this year were less than $150,000.
• The inventory level for houses in this price range is stable at about 6 months.
• There is a significant over supply of houses priced over $250,000.
  

The observations were factually correct, and the sort of generalizations one would expect to see or hear in a news report on the housing market. The sort of internal challenge to myself was to find a way to show the general statements to be in error.

I looked at two neighborhoods with moderately priced production grade homes. Eden Roc is the older of the two neighborhoods and is located inside Loop 1604. Bulverde Village is the newer neighborhood, north of Loop 1604. These neighborhoods are separated by about five miles.

So how do these neighborhood results agree with or differ from the previously described facts?

Over 50% of the houses sold this year were less than $150,000.

Eden Roc's results do match that statistic. However, Bulverde Village has a much lower percentage of sales in the less than $150,000 price range. One point for the general stats and one point for me for uncovering a flaw.

The inventory level for houses in this price range is stable at about 6 months.

The general statement was incorrect for both areas here. With only four months inventory, the market is slightly unbalanced with a slight bias for the Seller's. Not much of a bias because Buyers have more options than does a motivated Seller. Two points for flaw exposure.

There is a significant over supply of houses priced over $250,000.

Eden Roc has no houses in this price range and Bulverde Village has very few. No statistical conclusion can be drawn from these neighborhoods.

So what's been learned?

• All generalizations can be proved false, including this one. 
• Sometimes generalizations support a certain fact situation and sometimes they don't. 
• If you really want to understand a real estate market you have to examine the specific market and not go with a generalization.

I have a couple of luxury neighborhoods, Elm Creek, and The Dominion that I will use to further examine the three facts.

Helping clients understand the local market is my mission. Call me if I can help you understand our local housing market and work with you in buying or selling real property.

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