As I follow recent articles regarding the Chicago Housing Market and the Chicago Condo Market I’ve come to the conclusion that in order to be a journalist in this city you do not need to have the ability to interpret economic data nor do you need to have an understanding of the market place in which you are writing. I find it deplorable that major news sources in Chicago simply quote raw statistics and distort the true state of the Real Estate market. Though this is evident in all areas of the media.
The reason I mention this in my Real Estate Blog is because the average reader needs to be aware. All media coverage needs to be taken with a grain of salt or better yet a shot of tequila and a lime. Here are some basic things to look for or keep in mind when you are reading any article about Real Estate:
Focus on Year over Year Data: Reporters love to quote an index and compare “January to February.” They do this not because they want to mislead you but more than likely because they fail to grasp the basic economic evaluational skills to interpret the data. You are smarter. Instead, you want to look at Year over Year data. Month to Month fluctuations happen all the time for various reasons. If we try to explain each variation from month to month we will drive ourselves mad and will not have any definitive results. Year over Year data is always want you want to evaluate.
Understand Supply & Demand Levels: We need to understand sales relative to supply levels. For instance if “New construction condo sales are down from last year” this could simply mean there are not many new construction condos left to sell! However, if the reporter simply quoted a statistic you could be mislead to believing the condo market is again sluggish.
Who is Buying? If you see articles that quote “Sales up 25%” then you want to ask yourself who the buyers are. Are they sustainable buyers? What I mean by sustainable is are these buyers part of a new trend that will continue or were many of these buyers institutional and simply picking up foreclosure/bank inventory which can cause a quick “spike” in sales data.
What is the goal of the article? Lets face it; the goal of any article is to get readership. The more attention grabbing the headline the better, even if it is out of context with reality.
Paul Blackburn is an Illinois licensed Realtor & Broker with @ Properties in Chicago. He can always be reached via e-mail Paul@PKBlackburn.com