Comments on: 3 Bogus Real Estate Statistics – Know Them Or Be Burned By Them

By: Paul Chadwick

Paul Chadwick — Wed, 16 Dec 2009 20:20:10 +0000

Sorry for the long delay in answering your question.
10.5 months roughly equals 315 days,so 157 is the average.As a whole half of the home will sell in less than 157 days and half more. I do use statistics when helping people to make decisions about their homes, but I go back and dig through the listing history. This is a laborious task, but as you pointed out ,if you are trying to paint a usable and accurate picture for your clients it is currently the only reliable method. (I do not have accurate statistics for FISBOS, so I do not include them) I have relentlessly lobbied my MLS to change the way statistics are reported so that Realtors can present real and truthful data.( I know there are rascals who are more than happy to misreport the true statics)
I have some innovate ways of assessing data that I have developed over the years.I want to come at a problem with as many approaches as possible. The more data you can use, the smaller the margin of error. I have tracked my data (even for properties that I did not list), and have been quite accurate with my analysis. This is not meant to be bragging, but it points out your initial theory that bad data will give you poor results.

By: Chris

Chris — Tue, 15 Dec 2009 20:00:09 +0000

“Plenty of other resources exist that will allow a real estate professional to study real estate market statistics.”

As a new realtor in the field, I would be interested in knowing exactly what useful statistics I can study. I have been looking for a resource to learn effective and useful statistics for residential real estate, while I keep hearing the most common ones (like the above) are not actually accurate.

By: Joe Manausa

Joe Manausa — Mon, 06 Apr 2009 11:32:34 +0000

Thanks Paul. Can you explain how you deduce 157 days time on the market based upon 10.5 months supply of homes?

By: Paul Chadwick

Paul Chadwick — Fri, 03 Apr 2009 21:32:03 +0000

Use absorption rate as your market time gauge, this will reduce all the re-listing and time manipulation that clouds the information.
Simply take all the sales for an appropriate time frame, I would suggest either 6 months or one year, add up all the comparable sales in your target area and divide by the number of months you used.
Then pull the same demographic data set from the current actives in your MLS and divide by the number of sales per month from your first search.
Here is an example:
200 homes sold in the past 12 months that are equal to the subject.
200 divided by 12 = 16.6
16.6 homes sold per month in the past 12 months
currently there are 175 homes for sale that are equal to the subject
175 divided by 16.6 = 10.5
Based on the previous year it will take 10.5 months to clear the current inventory (this will change of course as inventory is added or subtracted).
This does not predict how any single home will perform but it will give you a guide to market averages.
In this example the average home will sell in about 157 days.

By: Joe Manausa

Joe Manausa — Mon, 12 Jan 2009 20:02:00 +0000

I think skepticism is a very safe way to view all things published. Thanks Greg.

By: Greg

Greg — Mon, 12 Jan 2009 19:22:06 +0000

In 10th grade math we are taught that statistics lie. I am always skeptical when anyone tells me statistics.

By: Joe Manausa

Joe Manausa — Fri, 10 Oct 2008 00:13:05 +0000

Thanks Mike, I agree. Here’s one to think about. NAR (and the national media) keeps reporting about the move in “average home price” to indicate how far we are appreciating or depreciating. The trouble is, no one is measuring what an “average home” really is. What if 10 years ago it was a 1,600 square foot home and today it is a 1,900 square foot home? Can we then talk about appreciation or are we comparing apples to oranges?

By: Mike Hale

Mike Hale — Thu, 09 Oct 2008 15:16:55 +0000

The 80/20 rule has always bugged me too! Another point to note is using Median vs Average. A single property in an area without a lot of activity can really throw the averages off, whereas using Median can give you a better picture. I’ve often seen people use whichever one was more beneficial to their argument too!

By: On the Moneyed Midways - August 15, 2008 | House Price Crash Information: House Price Crash Information | "Expert Information on Property" >> Price : News : Discussion : Statistics : Values : Estate Agents : Trends : Economics : Debt : Mortgages : L

Thu, 11 Sep 2008 09:59:34 +0000

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By: Joe Manausa

Joe Manausa — Fri, 05 Sep 2008 10:55:30 +0000

Hey Gus, thanks for the feedback. These are some good and strong statements, do you have any references to back them up?
- Tallahassee is not …. (what makes you say that?)
- Tallahassee has been compared to …. (Uh, Tallahassee is in Florida…. Read NAR/FAR reports and see why Tallahassee is considered one of the strongest markets in Florida)
- For Sale by owners are less than 1% of the market (Wrong. Blatantly, factually, incredibly wrong). Realtors in Tallahassee are right now doing roughly 65% of the business, that would make everyone else 35%. If you don’t count builders as “For Sale by Owners” that still leaves 15-20% for For Sale by Owners.
- Seller’s are getting 97-98% of what their realtor suggested – Come on Gus, you have no idea what any realtor suggested. This sounds like a pitch from a realtor lobbyist.

I love the feedback, come back any time. Just understand I don’t create my numbers, they are real.