Housing statistics are tough to pin down
John Ketzenberger, Indianapolis Star
April 16, 2009
With apologies to the band Chicago, does anybody really know
what the housing market's doing?
Does anybody really care?
If you're wondering whether it's a good time to buy or sell a house, you should care. Timing is everything, especially with the housing market in the dumper. People are looking for any sliver of hope. This week the Realtors delivered.
Re/Max reports "pended" sales -- deals that haven't closed yet -- were up in March compared with the same month a year ago in five of the nine counties covered in a first-ever monthly report. F.C. Tucker Co., which has released monthly reports for five years, also reports that the inventory of houses for sale is down nearly 16 percent over this time last year -- a hopeful sign.
And G.B. Landrigan noted that a house in Williams Creek changed hands for $1.9 million this year, the area's most expensive transaction.
How does the version from the Metropolitan Indianapolis Board of Realtors, the repository for all the sliced and diced statistics, stack up? It doesn't, thanks to a decision in March 2008 to dump year-over-year monthly reports for three-month rolling averages. "We think it's more valid to take the longer view," said Claire Belby, MIBOR's communications director.
Never mind that the standard for statistical comparison is month-over-month, whether you're comparing Eli Lilly's sales or the number of houses sold.
Another important wrinkle: Re/Max and Tucker count results in nine counties, while MIBOR and Landrigan include 13.
The problem is the lack of a standard format for reporting housing sales in Central Indiana. So Re/Max reports 1,635 homes were sold in March. Landrigan pegs it at 1,740.
The difference? Re/Max pulled the March numbers from MIBOR's database before Landrigan did. Since many MIBOR members report their numbers whenever they get around to it, the totals change throughout the month. That's why MIBOR waits until the last Monday of the month to make its report.
Forget about the official records from the county assessor's offices; those lag at least six months.
If you're looking to the statistics for an indication of when the market will bottom, you're out of luck. The statistical disarray makes any guess a good guess -- or a bad one.
The reports don't shy away from the bad news, they just emphasize the positive. So do the Realtors.
"So many people are optimists," said Jim Litten, president of Tucker's residential real estate division. "So am I, but I'm also a realist."
That means Litten paid attention in early 2006 when internal statistics that aren't part of Tucker's public release showed the number of showings had dropped dramatically.
"When that happens, sales will fall," Litten said. "It's an indicator that has never failed."
The number-crunchers won't find that statistic in MIBOR's database; Litten's been tracking it internally for 20 years. There is plenty of other information in the MIBOR database, known officially as the Broker Listing Cooperative. It includes all of the information from the Multiple Listing Service as reported by MIBOR members, which Belby said includes about 75 percent of the region's transactions.
It's no coincidence that Re/Max decided to enter the fray this month. The reports generated from MIBOR data are good marketing tools.
Just keep your skepticism handy when you read them.