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  • April 14, 2006 at 10:52 PM #6493
    powayseller
    Participant

    This month, the report is about data collection. An excerpt is copied below.

    Carlsbad South single family detached housing market: This will not be a writeup on this area this month. It was brought to my attention that my past analysis was in error for 92009, due to the zip code split that occurred. Unfortunately that is correct. When the split occurred, I was led to believe that the past sales would be sorted into the correct zip codes. This made sense to me for the purpose of maintaining data integrity and since every address has a zip code and every listing has an address it should be doable. Unfortunately I never double checked and I made the classical “to assume” mistake.

    I spend a great deal of time breaking down the market statistics so that I can present a more accurate picture of the market than just reporting the average price. While the average price is mathematically correct, comparing to past averages is very misleading, particularly in a changing market. There is a lot going on in our market that the average price number does not reflect, especially when comparing to past averages. I believe that everyone should have a good macro overview of our market so that they can make wise buying or selling decisions. These overviews do not have anything to do with the price of a specific home that gets down to the neighborhood and the street.

    April 17, 2006 at 12:08 PM #24288
    sdrealtor
    Participant

    I’m Back!

    Nice mea culpa! Like I always say…..question everything and assume nothing. He assumed and got egg on his face. It’s interesting that he claims he was led to beleive otherwise….I wonder who if anyone actually led him to beleive this or was he simply cutting corners on his analysis and not really asking the right questions?

    The problem with what he does is he breaks down the data on a macro level without really understanding it on a micro level. Without an understanding of the micro level its nearly impossible to present an accurate picture. Here’s an example..I call this

    How much did this house sell for?

    Joe Realtor lists a house for $1M. The first weekend he holds an open house and decides he loves it himself and wants to buy it. He buys the house with 20% down and it is reported as a sale for $1M. However, he was paid a $50,000 commission (5%- the market average). The seller also paid 1 point on his loan. Through the course of his inspection he found several issues that he requested the seller to address. In lieu of fixing them the seller gave him a $15,000 credit for paint, carpet and repairs. HOW MUCH DID THIS HOUSE REALLY SELL FOR?

    BTW, This happens all the time.

    Wish me luck…tonite I get the pleasure of presenting my clients offer to a seller and explaining why we beleive his house is worth $100,000 less than he beleives without even accounting for a downturn. I suspect it wont be the first time someone throws me out of their home nor will it be the last. Don’t you wish you had my job?

    April 17, 2006 at 1:11 PM #24292
    powayseller
    Participant

    Welcome back sdrealtor. I missed reading you around here.

    Good luck on the deal. Sellers need to wake up! I hope yours accepts the offer.

    I believe there’s plenty of business for both you and Bob, so you can give him a break. Unless of course you care to present your data…so it can be scrutinized by everyone else. Are you up for it?

    April 17, 2006 at 2:15 PM #24295
    sdrealtor
    Participant

    I’m not one for presenting analysis on data that is inherently flawed in so many respects. Did you read my comments on “How Much did this house sell for?” The data is riddled with examples like this. This sale was reported as a $1M sale when it was actually 10% less. This was a real sale by an agent that wanted to “keep the comps up” in their neighborhood and was willing to pay the extra taxes. Things like this happen all the time and distort the data so as to make much of it meaningless. That is why I don’t give a lot of creedence to “birds eye view” analysis in real estate and why I say the best analysis is from a local agent with the knowledge, skills and experience to do so. Most don’t posses this things, so the laughter I heard when I suggested this is completely understood. As for Bob, I dont have anything personal against him. I just have a hard time when ANYONE sitting behind a desk tries to come off as an expert without wearing out a lot of shoe leather.

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