A reader writes in to poke fun at a few “awfully massaged” charts included in last week’s monthly MLS report from the Houston Association of Realtors, calling them “the unintended consequences of crazy average-it-all-together-to-create-a-veneer-of-stability reporting”:
â€¦.the latest monthly sales numbers for single family and condo/townhomes are ACTUALLY OFF THE BOTTOM OF THE CHARTS!!
HAR’s sales-volume charts show 12-month moving averages, but even that isn’t enough to keep the latest numbers from dropping through the floor:
The unintentional comedy arises from the fact that the latest values very prominently highlighted in the boxes (2,827 & 203) are well below the scale on either of these sales volume graphs. . . .
It also reveals WAAY TO MUCH data smoothing on their part which calls into question their credibility. Their charts convey almost no information -on purpose.
Okay, but if you’ve got any actual information to share, break it to us gently, please:
Same data as HAR, presented a different way, and PRESTO!! â€“it looks totally different.
The HAR graphics, complains the reader
are designed to make everything look flat and slightly rising. This keeps buyers and sellers interested at all times throughout the year. Imagine if they were publishing my chart. The Realtorâ€™s slogan â€œNow is a great time to buy or sell a home!â€ â€¦.would be replaced by sellers thinking â€œonly sell in the summer!â€ and buyers thinking â€œonly buy in the winter!!â€ it would be a mess. So I understand why they smooth things so much.
To get rid of this seasonal trend, an analyst would typically compare the same month (eg. January 2009 to January 2008) It would be unfair to compare a June home sale with a November one. HAR, however, goes one big leap further: they take the average of ALL of the previous 12 months â€“completely smoothing things out â€“but also concealing the recent drop off in volume/prices.
What’s the reader’s take on the data?
Our market has held up better than most, but it looks to be turning down quickly â€“their data, not mine. Really, we are on the same rollercoaster as the rest of the country â€“just on the last car. Look at the trend in the grey bars, volume has been dropping since 2006! We have all been buying into this â€œnot in Houstonâ€ BS and lower prices have always, always, always followed weaker volumes around the country. Now oil is under $40 bucks. â€œItâ€™s a GREAT time to buy or sell a home!!â€
Originals of top 2 charts: HAR