Tidbits of false information burn like fire in the real estate world. Sellers in particular love to hear good market information. Well, who wouldn't? But as I said, it's "false" information and when it comes from someone who isn't in the business, I'm suspect.
An editor for our local Patch newspaper wrote an article comparing home sales in January of 2013 and 2014. Just one month of sales in fairly small North Shore villages. The headline claimed that home prices this year were up "significantly" over last year. Remember, we're just comparing Januarys.
The numbers were so outstanding that I checked the Multiple Listing Service myself. For the two towns that were discussed, Winnetka and Glencoe, sale prices increased by 22% and 54%. But surprise me! The numbers were accurate.
But . . . all these statistics were based on the median price on a very low number of sales.
Glencoe, which supposedly had an incredible 54% increase in home prices (wouldn't THAT have made the news?) had only 6 sales with 5 of them under $1 million.
But look at 2014, it's obvious that the sales were simply much higher priced than the sampling of homes that sold in 2013. Comparing 8 or 9 homes a year apart should not conclude that prices have risen 54%. By the numbers, they have. But I guarantee that the North Shore is not seeing such high inflation rates on real estate.
Every list of numbers has a median in it, but proclaiming that prices have "significantly" increased is inaccurate and misleading. At the very least, use a larger sampling - either the entire year, or the entire area for one month.
People love talking and reading about real estate. If you don't have the credentials to understand and interpret the statistics, ask someone who does. Yes, the numbers are accurate - but the article as written was worthless. The public will misinterpret the numbers and our jobs to get homes priced reasonably will be more difficult.
On two listing appointments this week, the sellers asked if I had seen that great article about house prices going up by more than 50% . . . I believe I've got my work cut out for me.
Filed under: Real Estate