Westport, Connecticut Moves


Real Estate Statistics – Go Figure! - part 2

Real Estate Statistics – Go Figure!
Part 2

Drilling Down the Numbers


Unit Sales is a pretty straight forward statistic.  However, when determining trends, it is important that the comparison be apples to apples (e.g. single-family homes to single-family homes, condos to condos, antiques to antiques, etc.)  Since real estate sales are seasonal, trends are more accurately portrayed by comparing statistics with comparable time periods for the preceding year(s), whether monthly, quarterly or year-to-date, rather than with previous months or quarters.


Listing and Selling Price figures have a few wrinkles to them.  The listing price used in most calculations is the current asking price or price in effect when the sales transaction was negotiated.  It does not take into account price reductions taken during the current listing, or original listing price for previously expired or cancelled listings.  Although some may argue that the earlier prices are irrelevant because the market has determined the correct price, knowing at what price(s) a house didn’t sell may be illuminating when pricing your home.

The listing price to selling price ratio is also affected by use of the most recent listing price.  The figures may show homes selling at 95% of asking price, while the percentages might drop to 80 or 85% if applied to original asking price.  Taking into account how long the house has been listed, how the price compares to similar properties and what the average sale to list price ratio is, can provide guidance when deciding on an offer price.

One ongoing debate concerns the use of Average vs. Median sales dataAverage selling (or listing) price may be skewed by the inclusion of exceptionally low or high priced properties.  The distortion is flattened in markets with a large number of transactions.  In a smaller market, one aberrant sale can incorrectly indicate the decline or acceleration of the market.


Using the median sales price eliminates the distortion caused by an extreme data point because it simply reflects an equal number of sales above and below the median price.  However, median price may still offer misleading information about market trends because it may simply be reflecting a change in the “shape” of the market rather than the direction of prices.   

Take a situation where there is an abundance of inventory at the upper end of the market, causing prices in this segment to drop sharply.  Consumers taking advantage of lower mortgage rates and falling prices purchase a disproportionate number of larger homes.  Median sales price increases because there are more large homes sold, while the reality is that prices are declining.


Days on Market is another statistic that may not paint a true picture.  The market time reported is only reflective of the current listing.  Adding days on market of previous listings presents a more accurate figure.  Some MLSes now offer a total market time statistic


The Bottom Line

Most certainly, the statistics that you receive will be true, but the important question is, will they be accurate?  Understanding the underlying makeup of the numbers and the factors that affect them, will guide you in asking the right questions.  Being able to accurately interpret the data will enhance the decision making process.  Working together with an informed market expert will enable you to make the best use of the information.  As Sy Syms says, “An educated consumer is our best customer.” 

Copyright © 2011 Marilyn Katz, All Rights Reserved, Active Rain - Real Estate Statistics – Go Figure! - part 2


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Marilyn Katz

      Marilyn Katz

    Berkshire Hathaway Homes Services New England Properties    
  Servings Westport, CT
  and the surrounding communities  

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Copyright © 2013 Marilyn Katz, All Rights Reserved

Comment balloon 2 commentsMarilyn Katz • September 27 2011 10:33PM


Marilyn - Thank you for sharing quality information on real estate statistics.

Posted by John Pusa, Your All Time Realtor With Exceptional Service (Berkshire Hathaway Home Services Crest) over 7 years ago

John-  Just scratched the surface but too often I hear people draw wrong conclusions from numbers taken out of context.  Hope it will encourage them to dig a little deeper.

Posted by Marilyn Katz, ABR, e-PRO - WestportCTProperties.com (Berkshire Hathaway HomeServices New England Properties) over 7 years ago