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Friday, January 4, 2008

Trying to understand the numbers…


I’ve been keeping track of a few numbers; statistics, if you will, for my little corner of the market for a little over a year now. Some of them I tracked week by week and kept the numbers (see Y-T-D Market Statistics for 2008) for every week; while some I just reported every week and threw away the last week’s numbers- the weekly Days On Market (DOM) and Inventory reports, for instance. Some of the numbers, like the DOM for each sold house that I kept on a monthly basis (See What’s Sold Locally) turned out to be too easy for Realtorsâ to game, so they turn out to be less meaningful that I had hoped. Other numbers like the Months Supply of Inventory moved at such a glacial pace that it got boring looking at the same number for 4-6 months on end, even if it was a valid reflection of the pace of sales of the inventory.

I thought that the calculated numbers that I did for each house that sold, which showed the sale price as a percent of the last listed price and the sale price as a factor of the SEV that was recorded for the house were meaningful and might help buyers and sellers with house pricing. I’m considering some other derived or calculate numbers for 2009 which will hopefully reflect where the median sold and listed prices are for each of the 4 Townships that I track weekly and maybe compare those against the wider market. My suspicion right now is that sales were way down in Milford Township and Village because the Median listed price for a house was out of line (high) for the market. There has toe be some explanation for the fact that little sold in those markets, compared to the other three that I track – Commerce, Highland and White Lake.

Some of the lack of sales in the Milford market might be attributed to the higher taxes in Milford Township than in surrounding townships (and certainly in the Village), and perhaps there was a drop-off that could be attributed to fear, uncertainty and doubt at the GM Proving Ground, which is the largest area employer and likely is also normally the biggest contributor of potential buyers. I suspect that a certain amount of PDS (Price Denial Syndrome – see my post of November 13). For some reason sellers in Milford have held on to traditional pricing ideas longer than elsewhere, somehow denying that it could be happening here. Well it is and has been for some time. Get real people. Milford is not somehow a peaceful island of price stability in the midst of a tumultuous real estate market storm.

So, I’m going to try to come up with some new metrics and charts this year that will allow me (and you) to better see what’s happening in the market and to better compare the four townships that I track against a wider (perhaps county-wide) market. I’ll admit that I haven’t quite figured out what makes sense yet – metrics that are both statistically meaningful and from which I and you can draw meaningful conclusions to help us take actions. One thing that I have seen is that it seems to be more useful to have running week-by-week-numbers, rather than to just show the numbers for a week in isolation. You can’t see trends without something to compare against week-over-week. It also may make sense to start doing some “same month last year” comparisons on the data that I have from 2008 and what I collect this year.

So, stay tuned in and let me know what your ideas are for what you’d like to see, I’ll be posting all of the numbers and reports on the Market Statistics page on my Web site http://www.themilfordteam.com/, with links back to there from my other sites. The weekly What’s Sold Locally page will remain on the http://www.movetomilford.com/ Web site with a link to there from the Milford Team site. I’ll probably change the format a bit on some of the reports, because the bar charts that I chose for some became way to busy as the year progressed. I’m committed to keeping up the weekly statistics again this year, but also committed to trying to make them better.

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