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Dec 17

Confusing Real Estate Statistics

by Mary Teresa Fowler
Real Estate Statistics

Many people find it difficult to sort through the barrage of real estate statistics. After all, there are real estate numbers released on a quarterly, monthly, bi-weekly, and even weekly basis. Potential home buyers and home sellers must wade though scores of information before making a final decision.

Confusing Stats

It is not surprising that real estate numbers can be a confusing lot. After all, real estate is full of statistics. Remember Mark Twain's classic quote.

"There are three kinds of lies: lies, damned lies, and statistics." ~ Mark Twain.

No doubt, statistics have a questionable reputation. Generally, they are not 'lies' but Mark Twain (and others who have used this quote or a similar version) was probably referring to the persuasive power of numbers. Statistics can be used to bolster weak arguments. On the other hand, they might be dismissed by people on the opposing side of the statistics.

In addition, there is the odd journalist who goes out of their way to make an extraordinary headline out of ordinary statistics. Writers need to grab the readers' attention. Shocking or scary statistics are bound to garner interest and publications are not blind to that fact.

If there were 4,000 home sales in October and 3,800 home purchases in November, readers can expect the headline – Home Sales in Definite Decline. The journalist has published correct information. In this fictional example, home sales declined in November but the article might leave out a few important numbers. The author might not refer to the 5,200 sales in September or the 3,700 home purchases in August.

Statistics show the facts but they can hide the 'ebb and flow' of events. Long-term effects can be influenced by several external factors. A short-term statistic shows a more narrow perspective. They represent the "here and now."

Long-Term Commitment

Home buyers and sellers are facing decisions with long-term effects. They have to take a look at today's statistics but they must also examine tomorrow's outlook and future possibilities. A long term commitment requires exploring a broader range of statistics than this week's numbers. Home buyers and sellers must decipher overall trends and year-to-year comparisons.

They should view and review real estate statistics. Buying a house is a serious decision because you are buying "your home." Even if you are just looking at a home purchase as an investment, it requires commitment. If you hold on to the house for the long term, it can be a worthwhile investment – no matter which shocking statistics appear in the interim.

Through extensive research, individuals can get a better feel for the real estate market. Buyers and sellers need to ignore all the hype and stick with the basics. For example, a home buyer should be able to answer 'yes' to a few basic questions before they decide on home ownership.

Basic Questions for Home Buyers

  • Do you have a good credit score? 
  • Do you have a steady job or career? 
  • Do you have a stable income? 
  • Do you plan on being in this location for more than 4 years? 
  • If you own a home, have you owned it for longer than 5 years?

WHAT DO THESE TORONTO REAL ESTATE NUMBERS MEAN, ANYWAY?

Are You Ever Confused By Real Estate Statistics?

Image courtesy of liveinalpharetta.cm

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