“Home Sales Increase More Than 5% in February”
Does today’s Huntsville Times Front-page Headline tell the whole story? Well obviously a headline, any headline, simply never tells a whole story. A headline, like a title, is designed to catch a reader’s attention, to entice their imagination, so that they may possibly dig deeper into the entire article or book and hey, perhaps even buy today’s paper.
In all fairness to the Huntsville Times, who is simply quoting the Huntsville Area Association of Realtors (HAAR), their story and the statistics presented by HAAR are accurate and even the negative news is there for knowledgeable and close readers, although not as detailed. However, they do seem to be presented with an overly positive slant completely ignoring the most predominate attribute of Real Estate statistics: Seasonality.
Obviously a 5% increase in sales is a good thing right? But just how positive is a monthly increase in sales from Jan 2009 to Feb 2009? As it so happens, given the seasonality of Real Estate sales, February almost always shows an increase in sales over January in any given year.
For example Madison County single family home sales:
- Jan 2006 (317) – Feb 2006 (405) = increase of 27.8%
- Jan 2007 (406) – Feb 2007 (442) = increase of 8.9%
- Jan 2008 (318) – Feb 2008 (394) = increase of 23.9%
So is the recent 5% seasonal increase in sales really good news, if in reality it is one of the lowest comparable seasonal increases in a decade?
In fairness to HAAR, they of course are not the only professional Real Estate organization that spins the news as it is also very common in reports from the National Association of Realtors (NAR). It seems to be an ingrained attribute of the industry, and in fact it could be argued that it is simply human nature to present one’s case in the most favorable light.
However if you visit consumer discussion websites, such as City Data, you will from time-to-time sense some very negative consequences being wielded upon the Real Estate industry. The most common joke bantered about is, “Ask any agent, and it is always a good time to be buying or selling real estate”. When in reality the answer is so simple everyone understands it: buyer markets favor the buyer, seller markets favor the seller, and neutral markets favor neither. In neutral markets summer is the best time to sell and winter the best time to buy.
There is a Major Shift going on in the Real Estate industry, as detailed in a recent book entitled ‘Shift’ authored by the founders of Keller Williams. The Shift that must occur within the industry is a Shift in culture, because the Real Estate business is actually not about properties, not even good properties, it is all about relationships and nothing helps a relationship more than honesty, integrity, and trust.
Ok, I am done with this rant!
Tim (Webmaster and Husband of one Realtor that gets it)