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Mount Data invites you to comment on any aspect of this website. If you are referring to an article, please include its name and the date of your post. ___________________________________________ From TLM Springdale "Paul. I am impressed with your monthly charts and feel it offers a good opportunity for me to increase my sales and inventory. Thanks for doing this. Pleas sign me up for your subscription service." Glad to have you as a subscriber. Thanks for your support!~Paul ______________________________________ From P.B. Bella Vista "Paul, I understand you have training videos available for subscribing agents to help in understanding your monthly charts and graphs. Can I see one even though I am not a subscriber? No problem. In fact, all the videos are available for review on the website under the "Education" tab. I believe the understanding of the charts can do nothing but enhance the integrity of our profession and our service to our clients.~Paul _______________________________________________ From S.P. Rogers "Can you make available some samples of the data you produce for agents every month?" Sure, Susannah, be glad to. I am putting the annual reports on the website as well as some general interest charts showing the real estate market environment in Northwest Arkansas. They are on the "Archives" page of the website.Any company or agent that would like to receive these monthly charts and graphs or all cities and counties should contact us.~Paul ________________________________________ From M.R. Fayetteville "Thanks Paul for sending me your video and newsletter each month. I look forward to your information. We are in an interesting market and time. I’m not sure anyone in the business today has experienced what may be unfolding. It will be an intriguing ride. Keep up the good work." Mark, Thanks for your comments. It is nice to know that the reports are read and appreciated!-Paul ____________________________________________________ From T.V. Rogers "Great video. Thanks for your hard work!!!" Thanks, Tam1~-Paul ________________________________________________________ From C.K. Rogers "Paul, I find your charts and graphs very helpful. Your Year end report [2007], was brilliant. I pass your information on to wife Wendy and some times to Tina D. I also use it in class always crediting you." Thanks, Chad. I appreciate your support-Paul ________________________________________________________ Mike was frustrated: "Now I read that the median value can be deceptive and cannot be relied on to tell the truth about the market. What do you think?" Paul Answers: "It is amazing what can be done with numbers with few data points and as an intellectual "fun with numbers" type exercise,. but when we deal with the real world and thousands of data points, reality has a way of claiming the last say. This deserves a full discussion. The question brings to light the real market in fact, as opposed to academic speculation. Along the way, discover how concessions in square-footage is an often overlooked hidden key of value. "Are We Being Mean to the Median?" _________________________________________________________ To: Paul R.Bynum Executive Broker, Mount Data Senior Analyst Dear Paul, "My husband and I wanted to thank you for the through and outstanding job you did for us. Your report on our proposed subdivision was comprehensive and helped us to fine tune our time line, marketing approach and overall financial risk. I would recommend for anyone contemplating a real estate related business in this uncertain times to make use of your invaluable knowledge of the facts, numbers and figures. Thanks again," Kelly and Randy Davidson-Coldwell Banker Faucette Kelly, it was a fun project to do for you. Glad it helped-Paul _________________________________________________________ From K.S. Springdale Kim wonders: "Your data shows a glut of inventory and sales that are down over previous years. It seems fundamental economics would indicate a drop in Median Sales Price. Why hasn't this happened?" Paul Responds: "One would think our median sales price should be falling with the rest of the country. Not so. The Median sales price in the US Metro areas through June of 2007 is $224,000. In the NE. it is $298,000, MW stands at $163,000, SO at $185,000, and the W at $349,000. And Northwest Arkansas? a mere $155,000. Compared to the rest of the country, for our size and growth, we still have a very low Median Sales Price in Northwest Arkansas. Folks moving in know this and compare our prices with wherever they are coming from. It is hard for out-of-state buyers to low-ball a list price they already see as a bargain. Another reason: Our job market is outstanding. We have maintained an unemployment index of at least 15% below the National index for the last five-years. This continues to bring buyers from outside Northwest Arkansas. There is at least one other reason. If you took away all the construction that has occurred in Northwest Arkansas after 1987, the perception of what is left would be very little. We are a high-growth, new construction area. Our area feels new, fresh, and vital. Unlike most cities in America, we are young, healthy and vibrant. Remember the old real estate adage, location, location, location? A large part of the value and draw of Northwest Arkansas is the community amenities offered by its commercial growth. Our commercial growth continues even while the residential market slows. When a buyer buys a home, he values not just the location within the community, but also the area shared by all the local communities. Northwest Arkansas has value that is apparent by buyers who see well beyond its present problems of glutted inventories and ratios. They see this market adjustment period as temporary and they see the gift of Northwest Arkansas as eternal. (National data from National Association of Realtor's Website: www.realtor.com. Local data from the MLX database). ____________________________________________________ Kathy inquires: How can one source say the average sale price is decreasing and you say the average existing sales price is increasing? Are you both using the same data? Paul answers: Probably. The average price includes many high-end sales that tend to skew the "average" (mean) higher. It is obtained by dividing total volume by the number of sales. I report "Median" average, which is the price that the mid-percentile (50%), of the buyers are paying. If less buyers buy high-end homes this will show-up as a decrease in "mean-average" sale price. Yet, the median average could actually increase. (And has in our market). Both types of averages are useful. Whoever is reporting the data should make clear which one they are using. See a further discussion in the glossary under "Average". ________________________________________________________________ From K.H. Fayetteville: Katie asks: "I know you indicate the median sales price is increasing every year. But what if the median square-footage is also increasing? Would that mean that homes are not really increasing in value, but instead, the average buyer was buying more square-footage?" Paul answers: If the median square footage were increasing you would be perfectly right! To test this, I ran the annual median sale prices along with the median square-footage. Here is the table:
___________________________________________________________ Stephen inquires: "I read in your April 2007 issue of the newsletter (Release Dates and Data Accuracy), that you snapshot the market on the 12th of the month to get the data for the previous month. Isn't there still a lot of sales and other data not reported in the database at that time? Isn't it true that some companies add to the database over a period of many months? Could not having all the data available for a given month lead to inaccurate reports given to the public and news media? Do you consider this a deceptive and unethical practice?" Paul Responds: Ouch! Not quite sure if this is a slap in the face, some sort of compliment, or both. The questions, however are legitimate and should be of concern. In fact, this is such an important series of questions, that I have answered with an article. The quick answers are Yes, yes, it depends, and absolutely not. For a fuller discussion try: Changes in Reported Data. Drop me an email on your take.... ________________________________________________________________ From D.J. Springdale: Detra inquires: "I noticed the average of the total "Months of Inventory" for the month of September was reported at 11.6 months. Yet the average for the total "Days-On Market" was reported to be 80 days. This seems inconsistent. Am I missing something?" Paul Responds: Good observation. In any given month, a percentage of the total current inventory will go under contract as pending homes. The "Days-On-Market" tracks only the inventory that actually goes under contract. It gives the median average time-from listing, to pending-for a home to leave the market. The "Months of Inventory" uses ALL the inventory that is current and divides this by the average number of pending in a month. This inventory includes a large percentage of homes that will never sell. The Months of Inventory (MOI), is a ratio of the monthly number of buyers to the total available inventory. A MOI above 5-6 represents a "Buyer's Market". Also, the higher the MOI, the more stagnant the inventory. ________________________________________________________________
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© 2009 by Paul R. Bynum |
