Thanks to the recent release of US Census data , I am sure that this will not be the last article, in which a data analyst gets together with a graphics designer to create a story that distorts reality or simply draws inaccurate conclusions from a given set of data without a full understanding of the data and how it is applied to local market conditions. So brace yourself and be prepared to peer underneath the onslaught of quantity to get to the quality of the stories you and your clients encounter.
Phillip Reese may of spent many years of study in North Carolina and I am sure he is a bright guy (after all I am from N.C. as well ), however whenever your data suggests a close relationship between two cities that are as different as Oakland and Sacramento , then it may be time to did a little deeper. I a spent the night in both cities and I for one slept sounder in Sac town.
If you walk into a dark room and flip the swith with no result , then it does not necessarily mean that your elelectrical panel is bad or that even the fuse is blown. It may be a bad switch or simply a blown bulb. The data provided is the same but the meaning and the correct corresponding actions are quite different.
The article list Sacramento's Vacancy rate as the second highest in Califrnia (8.4%) with only the notorious Oakland beating us in the race to the bottom. The headline reads "Housing Bust leaves a Glut of Vacant Homes" leaving us to believe that Investors should run for the exits while Renters are experiencing a dream come true with rents dropping like lead balloons all over the valley. Whether this was the intent of the article or not, I believe it is how the public will read the story and nothing could be further from reality.
The high number of vacant homes is reflective of two major factors. One of which was completely overlooked and the other that needed to be highlighted more for a proper perspective.
1. The size of the households. Sacramento packs nearly 25% more people into each household then most of the silicon valley communities with thier large number of single or "married with no kids" households This results in demand that shows more volatility in extreme market conditions like those found when the 2010 Census was completed.
2. Many of the vacant homes that were counted are not available as rentals at all , nor will they be for any predictable amount of time in the future. Due to the higher rate of foreclosure and the regulation driven (as opposed to market driven) enveironment found in Sacramento the high rate of vacancy is matched by an equally high demand for rentals that currently not being meet efficiently by the open market.
As a property manager we are seeing a very strong demand for available housing, and rapid increase in rents and a willingness of renters to assume more expenses both now and in the future thru aggressive lease terms. This is the exact opposite of the conditions that an uniformed reader or analyst might draw from simply consuming the information provided as if cause and effect were as simple as finding a watch in the woods and believing it mus have fallen from the sky
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