You can always find data to confirm what you already believe, but like anything, that doesn't make it accurate. My mother-in-law has a saying when she's cooking. It goes like this, "When you don't have the ingredients you need, don't panic, improvise." I've seen her make some crazy dishes with some pretty unusual improvisations, and they've worked out well. But, when it comes to markets and financial data, the data has to line up with the circumstances of the time or people may make decisions and life choices that could cost them dearly.
At a recent meeting of our local board of Realtors, the chief economist for the National Association of Realtors, Dr. Lawerance Yun shared his current view of the Shenandoah Valley real estate market. Ironically, since I do a continuous flow of market reports, colleagues ran up to me at the end to see if I agreed with Dr. Yun's assessment. In this case, I was pretty in-line with his assessment.
In 2008-2010, I read market assessments from some pretty well-known brainy economists, but I couldn't agree with them. I thought they were painting a rosy picture of the economy that I just didn't see on the ground or in the data. During that time, 2010 ended up being the deepest part of the recession for our community. A lot of local people lost their homes, jobs and life savings. Based on the economists assessments of the time, they should have been fine, but the reality was, the economists were wrong.
One of the great things about doing market reports of any market, is that you always have a feel for where the market is at any time. It's like a snap-shot in time. If the market has slowed, you can see it. If it has picked up, you can see that too. If it is off drastically, you might be seeing something that is hinting of bleak days ahead. I didnt' blog prior to the recession, but I saw things happening, but I didn't know how to interpret them.
Today, after half a dozen years of doing market reports, I'm very tuned-in to market changes. When I see an economist stating good news when the local market is changing negatively, I can adjust my marketing to meet the needs that are being created by a downturn. I can also explain what I see to my clients so they gain an advantage over the competition. I can help them take advantage of market changes whether they are good or bad. Get comfortable assessing your own market.
Don't be afraid to take a serious look at your market and see it for what it is. Don't be swayed by what professional number crunchers are telling you if it doesn't line up with what you're seeing. In a seminar I taught years ago, I used to say, "Figures don't lie, but liars figure." That's not to call number crunchers liars, but it really means numbers can be manipulated.
Locally, if you ask a dozen Realtors if the market has slowed, nearly all will say yes. I ran the data for the past 11 months and the same 11 months for 5 years. The market has not slowed. What has changed is the number of Realtors working in our market. We've gone from around 500 to nearly 1200. When you add that many agents in a small market, the work is going to get thinned out. That will give the impression of a slowing market when in reality, it has just been spread over more people. The "real" data shows that the market is healthy and moving normally. The talking heads say it has slowed. What do you choose to believe, the data or the speculators? Always do your own homework. It will keep you plugged into changes so you'll always be ready to adjust your efforts to keep consistently stay on top. Oh, and by the way, Dr. Yun agreed with me.