If you've heard me on the radio, seen me on TV or even read this blog before you know how crazy misleading information on the housing biz makes me. Today another dose of it came down in our local media stating that August home sales numbers increased 14% year to year compared to 2012. Closed home sales increased by over 14% from one year ago. Closed home sales data is one of the weakest benchmarks of the actual housing industry that is constantly put out there. Why? Closed sales are those that went under contract over a period of months and not in a short time frame like 30 days (or the month of August). Many of them occurred when home mortgage rates were well below the 4.875% that they are today. Some of them were new construction contracts signed in March or April. In short real estate closings that occur in a given month are simply not a good gauge of the market at that moment in time. So what is? Accepted contracts or pending home sales that happen in one 30 day time frame are a much better example. In our metro in August of 2012, 2655 homes went under contract. Exactly one year later in August of 2013 2790 homes went under contract. A difference of less than 5%. It's a positive number and one that is much more accurate of real conditions than the closed sales figures represents. So why does this bother me so much? Home sellers and buyers are making decisions based on these numbers. You would think the numbers my industry reports would be the best ones available to help consumers in their decision process. Frankly sometimes I don't know how consumers come to any sound conclusions when these types of numbers appear in the media. The fact is....when this type of data does come out...consumers aren't making the most informed decisions. They simply can't.
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