Real estate observers who Googled ‘existing home sales’ on Friday would have encountered a valuable reminder of how statistics can be true—but nonetheless misleading. National media reports had uniformly reported strong results from the residential housing market—but Southeast Michigan readers looking for more precise details found headlines that let them (as the mind-reading tricksters used to say) “Pick a number–any number.”
Google’s screen-topping “Top Stories” boxes displayed Friday’s leading ‘existing home sales’ entries like this:
- “Existing home sales jump 25 percent in July, continue record pace” –Woodworking Network
- “Insatiable demand drives July pending home sales up 15% annually” – HousingWire
- “Pending Home Sales Rise 5.9% in July” – PR Newswire
The three top stories illustrate something that Southeast Michigan real estate followers have come to learn: that glancing at top-line summaries—especially when they contain statistics—can be more misleading than informative.
On Friday, if you were looking to find out how ‘existing home sales’ are doing (as opposed to ‘new homes’ or ‘all homes’), the Woodworking Network reported an extremely strong showing. Sales had jumped 25% in July—but ‘jumped’ compared with what? The answer came from the National Association of Realtors®: compared with July sales the previous year.
The HousingWire story also had July activity growing, but only by 15%. That report was accurate, too—but it wasn’t about sales per se—it dealt with “pending” home sales, which count the number of signed contracts. Since these are generated a month or two before the actual sales are finalized and counted, the numbers are quite different.
But how to explain the third story? It, too, reported on a rise in July’s pending sales—but by only 5.9%! The discrepancy could be found in the NAR press release (which turns out to be the source of all three of Google’s Top Stories). The smaller number registered the growth from the previous month, rather than the same month a year earlier.
BTW, CNBC’s Diana Olick weighed in with (rather than 25% or 15% or 5.9%) “Existing home sales up 8.7% versus a year ago.” Good show, Ms. Olick—you didn’t have to read further: that headline said it all!
Of course, the numbers that really matter to potential home buyers and sellers are the current ones here in our own Southeast Michigan real estate market. Call me for a quick rundown—or, if you wish, a complete no-obligation report with comparable results for properties like yours!