Interpreting Real Estate Statistics

Posted by Jeff Aughey on Monday, March 24th, 2008 at 3:41pm.

One of my pet peeves is the way the mass media throws out headlines without giving readers a way to evaluate the information. For instance... I read the headline in an Associated Press story released today, which stated "Home Sales Rise Unexpectedly in February, As Prices Keep Tumbling." This story was based on a National Association of Realtors' report on February home sales figures. The average reader will assume that February was exceptionally strong. But the thing that the casual reader may not realize is that it's a lagging indicator. This information is actually based on how many sales closed in February. These statistics relay information from 30-60 days prior (the average time it takes a house to move from contract to close in this area). If you look at NEW home sales, you will have a better indicator because new home sales data is reported by how many homes went under contract, not how many close. That shows a more accurate picture of the recent status for the reported dates. Personally, I always report my statistics based on the number of homes that go under contract rather than the closing dates, since the closing dates may fluctuate dramatically and it may take some extra time after that to compile the data for the report. You can see my regularly updated home sales statistics and Alpharetta/Johns Creek information online.

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