Numbers, Statistics & the Market – What do they mean to you?

numbersDay in and day out we always hear about numbers. The price of this, the cost of that, the value of those, but what do all these things mean. The fact is numbers and statistics can be misconstrued. On the surface, you may think that they are black and white in character, but the reality is that they can be easily skewed in most instances.

I love dealing with numbers and part of what may have brought this to a head is my dealing with financial investment calculations and pro forma income statements while studying for my Broker’s exam.

The only reason that someone will skew the numbers is to sway someone else over to their side. What other reason could there be? What other use could there be? The sad part is that someone is being deluded & I take issue with that.

Part of the reason this post came about is because of David Lereah, the former NAR (National Association of Realtors®) Economist’s revelation that he put a ‘positive spin’ on the numbers during his tenure. I’ve felt the same with Lawrence Yun, the present NAR Economist. Like Lereah stated, he was working for the association and therefore it was his job to do so.

So, therefore, he’s spouting what is basically bs, but because of his position many will take it at face value and believe it. This happens all the time, whether it be in business, politics, etc. Again, I have a major issue here. You may wish to call it a spin or whatever, but the long and short of it is that it’s still blatantly a lie! I don’t care how you want to color it or what name you wish to put on it – it is what it is – a LIE!!

Another reason that brought this to the forefront was a paper that I read yesterday issued by Morgan Stanley entitled, Interest Rate Strategy: Implications of a 4.5% Mortgage Rate. While again the paper is very interesting & there are some hard facts there, I also think that there are some intrinsic items that are missing and cannot be denoted with numbers.

This also brings me to the Comparative Market Analysis (CMA) which you hear about so much. All it is an ‘opinion’ of value and should surely not be construed with an appraisal. I stopped performing CMA’s many years ago because it is just so easy for anyone to skew those numbers. Now, don’t get me wrong, I’m sure most Realtors® are very realistic in their analyses. But at the same time I’m fairly sure that there are many that will skew those numbers just to get the listing. That does not help anyone in the long run & surely hurts you the consumer. And furthermore, does not help this industry, just as what the NAR economists have done.

This is a gross injustice to the many that work so hard at building our good reputations.

I use numbers and statistics quite a bit myself. Every month I produce 14 market statistics posts for cities and counties in which I work. When I use these numbers I try to make them black & white. If I skewed the numbers, all I’m doing is creating misinformation. I don’t see the use of that for it would only come back to haunt me.

This was not meant to be a rant, but hopefully just an eye opening awakening. Many of us are naïve in so many ways. It’s not that we are Pollyannas. It’s basically that we just wouldn’t expect such. I personally try to take things that I encounter at face value until proven otherwise. I think that treating things differently might make us a little jaded. So may be I am somewhat Pollyannish, but I moreso consider myself a realistic optimist.

With that said…until next time…Marc It Sold!

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