Title shamelessly copied from the excellent book by Nate Silver.
Vancouver realtor Steve Saretsky has released his preliminary summary of the September market and while September isn’t looking great, it isn’t quite the collapse that one might have expected given his earlier updates that showed sales at 10 year lows.
It’s great to see insiders like Saretsky and the online brokerage
YOLO Zolo adding new voices to the discussion with an analysis of up to date market data that cuts through the spin of the real estate boards. However the focus on day to day sales and prices can also lead to missing the forest for the trees. Rather than focusing on the larger picture, the discussion swings from excited speculation about how sales or average prices have collapsed, followed by muted backpedaling when it reverts to the mean. Humans are conditioned to see patterns in noise, and I am certainly guilty of doing the same at many points over the years.
The Zolo trends I find particularly misguided since they emphasize data over insight. The headline numbers are all averages with no indication of distribution or what the outliers might be. Oh look! Days on market for the $0-$250k segment exploded from 37 to 59 days! The market for shoe boxes must be crashing! But above $2.5 million it went from 25 to 14! Luxury market must be hot. In reality this is almost certainly all noise and means exactly nothing except that different properties are selling at different times.
Yes data is fun, but is this helping anyone make a sensible decision? Or are we all just destined to drown in info garbage? Is Zolo even trying to give people insight with their tools or are they just trying to blast people with numbers until they go running to their agents for help? Despite it being essentially our provincial past time to talk about real estate, there is still a lack of quality information available on the market. The issue is that the real estate industry exploits the information imbalance to sell expensive services, so they have no incentive to improve the tools. Meanwhile no one else has found a great way to monetize that doesn’t involve feeding leads to realtors under the guise of education (which is essentially the same conflict).
The magnitude of the price jump in the spring took everyone by surprise. But the market had been signalling for 1.5 years that prices were going to stabilize then increase via the trend in the months of inventory. I have to believe there is more signal like that, as well as better ways to present it to even the normal people that don’t hang out here.