Hello Everyone,
This is not the first time we have mentioned the quote about statistics attributed to Mark Twain, but the subject of this week's article compels us to make use of it again. The following excerpt from Wikipedia describes and encapsulates Twain's use of the phrase "Lies, damned lies, and statistics", though it reports that the origin of the quotation is disputed. See the full Wikipedia citation for an interesting read http://en.wikipedia.org/wiki/Lies,_damned_lies,_and_statistics
From Wikipedia, the free encyclopedia
"Lies, damned lies, and statistics" is a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments, and the tendency of people to disparage statistics that do not support their positions. It is also sometimes colloquially used to doubt statistics used to prove an opponent's point.
The term was popularised in the United States by Mark Twain (among others), who attributed it to the 19th-century British Prime Minister Benjamin Disraeli (1804–1881): "There are three kinds of lies: lies, damned lies, and statistics." However, the phrase is not found in any of Disraeli's works and the earliest known appearances were years after his death. Other coiners have therefore been proposed. The most plausible, given current evidence, is Englishman Sir Charles Wentworth Dilke (1843–1911).
Whatever the origin of the idea that statistics can be manipulated to support multiple positions, it is certainly a concept that is germane to the subject of this week's report.
Inventory has been building slowly but consistently for the last several weeks, for both Single Family Residences (SFR) and Condo's, and sales have been gaining momentum, particularly in Condo's and SFR's priced under $1million. 40.47% of MLS-listed SFR's under $1million were in contract as of March 15 even though overall SFR percentage in contract decreased about one and a half points, from 33.49% to 31.99%, largely on soft sales in the $1-3 million range. Sales of homes over $3million defied the trend, and actually increased from 7.59% in contract to 10.87% in contract. Overall days on market (DOM) for YTD sold SFR properties at 128 as of March 15. YTD SFR units sold as of 3.15.10 were 279, up 4.9% from the same period last year. This, all the more significant because of the artificial bump that sales received from the buyer tax incentives in the first half of 2010. Condo sales showing a similar, but even more pronounced trend, with percentage in contract of units under $1million at 35.25% and overall YTD condo unit sales of 96 up 14.3% from the 84 units sold in the same period last year.
We have mentioned a number of times in previous reports that in spite of percentages in contract that have historically been recognized as sellers' markets, sellers currently experience very limited ability to push the price envelope in this market climate. We have recognized for some time that the characterization of the market as "Buyers", "Sellers", etc. might bear some adjustment due to changes brought about by the large percentage of distressed sales in the Marin County real estate market, and we will try to explain why we feel that way. (Thank you, Mr. Twain)
During the period from January 1 to March 15, there were approximately 374 unit sales of SFR's and Condo's. The average sales price was $756,637, DOM were 134, and the average ratio of sales price to list price was 94.5%. Out of this total, approximately 147 units were what we would call "normal sales". Their combined average sales price was $981,132, DOM were 103, and the ratio of sales price to list price was about 93%. REO's, (real estate owned, or repossessions) accounted for approximately 65 units of the total. The average sales price of those units was $481,218, DOM were only 89, and the ratio of sales price to list price was 98.4%. Short sales accounted for approximately 36 units of the total. The average DOM were 243. Average sales price was $519,102, and the ratio of sales price to list price was 97%. There are several other sales segments that are not included here, so the examples listed do not add up to total YTD sales. But, from the examples it is easy to see that a characterization of the overall market does not necessarily represent a marketing prediction for any particular segment or specific home. What the overall view does do, if it is applied consistently over time, is show market movement and market trends. Consistency is normally considered a virtue, however, when conditions change, it is sometimes necessary to make adjustments. We believe that the abnormally long sale and escrow process for some types of distressed sales sales is inflating the percentage in contract to a significant degree. To characterize the market more accurately, we plan to adjust the percentages in contract that we use to describe the various kinds of markets. We will do this beginning with our next report, which marks the start of a new calendar quarter.
However we label the various segments, current market activity seems quite brisk, the atmosphere is upbeat, and the year ahead looks hopeful. We look forward to being able to continue to report to you on this positive note.
Until next time, wishing you all the best,
Fred
p.s. for access to spreadsheets, please see http://www.fredanlyan.com
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