Why Interpreting Statistics Can Be Challenging

by ritasimpson on December 16, 2011

in How's The Market

Have you noticed we keep getting conflicting notifications of how the real estate market is doing? That’s because it all depends on what is being put into the equation. If the study does not isolate the categories and reports on them separately, the conclusions can vary widely. Also Looking at the performance of each sector in each community then comparing it to the overall picture is more helpful in understanding why prices are and are not stabilizing…

Some analysts see a silver lining:

What’s the difference between distressed sales and non-distressed sales?

Unlike traditional owners, banks are often faster to cut prices in order to unload properties quickly—or what are called “distressed” sales. The upshot is that, the more homes being sold by lenders in any given month the faster prices tend to fall.

This was clear throughout the initial years of the housing bust. Prices declined most sharply in 2008 as banks dumped foreclosed properties at fire-sale prices. Owner-occupants are less likely to list their homes for sale in the winter months, too, which means that each winter there are also drops in prices because distressed sales account for a growing share of sales.


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