Real Estate “Statistics” — What to believe?
An overall look at brokerage claims and some important questions that buyers, sellers and agents should ask.
The #1 Real Estate brokerages. Ever wonder how several real estate brokerages can claim to be #1? I do. Every time I read the Sunday newspaper—yes, some of us Internet news junkies still at times enjoy the luxury of reading a “real” book and a “real” newspaper.
I often wonder what those brokerages measure to make the #1 claim. Does it include pending sales? Closed sales? Number of current listings? Single office or company numbers? City numbers? Suburban? Or both? A combination of all the above? Maybe it’s #1 for a particular week, a particular day or even another year. Whatever criteria they use, I wish they would really spell it out for the benefit of buyers, sellers and agents. And it should be prominent– instead of employing an asterisk that doesn’t require a magnifying glass to discover where the numbers come from and how they are substantiated.
Buyer statistics are another mystery to me. According to recent numbers from the National Assn of Realtors® some 74% of buyers use the internet for their home search. That sounds reasonable, but I have seen 80 and 83%, even 90% identified as the magic number. The median number of weeks buyers search? According to NAR, it’s 12. And the median number of homes they see? That’s 15. Maybe in another lifetime…but in 2011, with today’s inventory …15 homes? My buyers most certainly don’t fall into the median group.
How about your buyers? Or if you are a buyer, how many homes do you see, or think you will see before you make a decision?
And how about listing statistics? What’s the median number for showings before a contract appears—(a) when the property is priced fairly, and (b) after a price reduction or two. Those might be interesting statistics to show a home seller in good markets and in bad ones.
We see statistics employed all the time, but they are only as good as their source, calculation method and intention. When I took statistics in college, a survey we conducted had a 90% approval rate. It was phenomenal to get 9 out of 10 people to agree on an assortment of facts. Of course if those 10 individuals were all members of a jury, would the 90% in favor of conviction be as important to the accused as the one holdout would be.
It’s smart to pay attention to statistics, but it’s also smart to question the source, the methodology and the intent. Is it a market trend, or just a neighborhood change? Check the numbers. Ask the questions. An educated buyer, seller and agent are more important today than ever before.