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Reporting Real Estate When You Don't Understand The Stats

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By : Alan Barker    99 or more times read
Recently I was interviewed by our local newspaper. They asked me questions about the local real estate market, housing stats, and market trends.

I told them the truth and showed them stats and graphs about how home sales prices were down by about 10%, and home sales were down by about 20% from last year. I also told him that it was a good time for home buyers, because it is. Home prices are down, interest rates are low, there are more homes for sale to choose from than there has ever been, and first time buyers can get $8,000 from the government just for buying a home.

Well, today the article came out in the newspaper. The headline was, "'Good news for buyers’: Federal index: Logan home sales see only rise in Utah"

The "good news for buyers" part was referring to the quote from me. The Logan home sales see only rise in Utah part was from a report by the Federal Housing Finance Agency.

The funny thing about the headline is that buyers don't really want to see that home prices are up. Buyers want the best deal possible.

Then I looked to see what the Federal Housing Finance Agency was reporting, because clearly Logan Home Sales were not up. When comparing home sales with the second quarter of last year they are down every way possible. It turns out the report was showing the average price of home closings. This amount included home purchases, but even more home refinances. Because mortgage interest rates are so low, a lot of people have been refinancing, especially people with large mortgages on expensive homes.

What this report was showing wasn't an indication of Logan Home sales, or even of home prices. It was simply an average appraised value of homes closed in the second quarter.

I don't think the reporter was trying to be misleading, but if you're going to report real estate stats, It's important to understand what they mean.
Alan Barker is a Realtor Specializing in Logan Utah Real Estate. He also maintains real estate market condition blogs for Utah Real Estate and Home Sales. Alan is affiliated with Cornerstone Real Estate professionals.

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