Statistics and Salt: Liars, Dang Liars, and Statistics.

Please take the use of statistics in real estate with a grain of salt. They can be a piece of evidence, but rarely do they provide the whole story. Printed numbers can be especially convincing, but don’t take them as fact. Let’s look at two examples of how statistics can be misleading.

Big Picture Housing Data. Numerous news outlets and lobbying groups love to cite median home prices as evidence of the state of the housing market. This can be useful for analyzing general, big picture trends, but it isn’t very helpful when consumers are deciding whether to buy or sell a house. Why? Real estate is hyper-local. This means that on a block-to-block basis, factors such as property condition, seasonal adjustments, and personal tastes can all play a part in determining value. So the next time you read or hear that home prices in the Mid-Atlantic region are rising or falling, feel free to take that as a big-picture trend. But please remember, this might have very little to do with your house or your housing search. Determining specific value demands a detailed look at hyper-local, comparable sales and listings. Only then can you obtain an appropriate value range for a particular property. Each house and person is unique, and the data should be too!

Brokerage Marketing. Frequently, I see brokerages advertising that their listings obtain X% of the list price. While these types of statements make for powerful marketing, in reality, there isn’t a discernible way to verify the accuracy of these claims or whether they are in the client’s best interest. For example, if a broker sets the list price for a home on the low side, they might obtain an offer at (or even above!) the list price; however, the broker might also under-sell the property, causing the sellers to net less. So even if the statistics are correct, the end result might not be in the client’s best interest. Every transaction is unique. Stats be danged. Do what is best for you, not the broker.

If you would like to know whether it makes sense to sell or buy, give me a shout. I am a huge nerd for devouring data. I also listen to my clients – they usually know their house and their block better than anyone else! And I certainly won’t send you any misleading statistics about my brokerage. Just know that I will work hard on your behalf, be professional, and hopefully provide meaningful and objective guidance. Buy Smart. Live Well.