Explanation of real estate statistics

Explanation of real estate statistics

Explain basic real estate statistics

We are going to outline some basic real estate statistics that are released on a regular basis. In order to do this, we are going to use a single real estate marketplace that is located in Hood County – Texas. More precisely, we’ll be using single-family numbers for homes in Granbury Texas, a small town of about 8,000 that has seen significant real estate growth over the past 12 months. It is important when reviewing real estate statistics that you use a set of numbers large enough for consistency, but accurate enough to tell your story.

The statistics we will refer to are valid and accurate for the year discussed but are used to determine the real estate statistic itself.

We chose Granbury Tx as our example because the growth of the local real estate market there makes the stats stand out.

Anytime you are evaluating statistics, especially in real estate, the source of the numbers is extremely important. In most cases, MLS (Multiple Listing Service) provides the most accurate numbers when referring to real estate. This is because they have all listings by all local realtors in their database. In order to explain the data, we’ll be looking at the Granbury Tx home sales numbers, straight from MLS. These numbers are meant to give an example of how the statistics themselves should be read. Anytime you’re evaluating real estate numbers, it’s important to pay close attention to how you add up the numbers. In this case, we will only use the property of one family in Granbury City.

Basic real estate statistics

  • number of sales – That’s pretty self-explanatory. It is simply the number of single-family homes sold in a given month. In January of 2015, 51 single-family homes were sold. One thing to watch out for when looking at this statistic is that they use the contract date or the day the property actually closed. These two dates are usually 30 and 60 days apart, so it’s important to know which one to reference. Plus, many of the homes that count, if you use an “under contract” number, may not actually be closing! In our example, we’re using the number of homes that have already closed. In January 2016 they had an increase of over 49% bringing the total from 51 to 77. We rarely see growth of this level.
  • Sales volume Sales volume is simply the total amount of dollars spent on single-family housing during that month. Again, when reviewing this statistic, it is important to keep the types of properties consistent. If you are comparing two regions to see which has grown the most and you include vacant land in one region number, you must include it in the other region as well. As mentioned earlier, our examples include only single family properties. With the number of sales looking at units, you’d expect sales volume to go up appropriately, but in this case, it went up more than units (in percentage). Gross single-family home sales in Granbury in January of 2016 were $15,191,500 versus the January 2015 number of $9,281,915. This represents an increase of over 63%. Since sales volume rose at a greater rate than unit count, this reflects the median home sale which was much greater in 2016 than in 2015.
  • inventory months This statistic is commonly referred to when examining the real estate market. This statistic indicates the current rate of sales, how long it will take to sell through the current inventory level. This reflects supply and demand in the market. In our example, in January 2015 the inventory level was 9 months and in January 2016 it was down to 6 months. That’s a 33% decrease in available inventory! This means that if you are looking to buy a home in Granbury Tx, it will be a little more difficult in 2016 as there is less inventory available for purchase.
  • Medium days for sale – This statistic simply indicates how long it takes to put a single family’s property under contract. Don’t let “the sale” confuse you. To accurately show demand for active homes, you really want to track how long you’re “under contract.” The process of obtaining final lender and insurance approval and reaching closing can vary based on a variety of factors. In January 2015, the average days of sale were 88. That number dropped more than 30% to 61. Again, this tells you if you’re looking for homes in Granbury TX, you’d better get your offers in quickly as the most Desirable homes are going fast!
  • Average price This statistic can be derived in several ways. We’ll use it in its most raw form and it’ll simply be average home price Sold during that month. Be careful when looking at this statistic printed anywhere as how a user defines a sale date can vary. Needless to say, the average price can be used for active homes for sale or for homes that have been sold. The median price of active homes for sale is generally a fairly useless number since you can list a home at any price, with no prospect of it ever selling. Many homes are for sale at unrealistic prices and thus the active average price Houses for sale It can fluctuate wildly and give little insight into the market. You will want to look at the median price of homes sold. In January 2015, the average home sold was $181,998 and it jumped to $199,888 in the same month in 2016. That’s an increase of about 10%. This isn’t a number that really tells us the increase in home values ​​across the board, but simply what homes sold that month, what the average is.
  • Average price The average home sale price can be affected by several factors. All it takes is selling a $5 million home to get rid of those numbers. To get a better view of the overall increase in value, it may be best to look at the average selling price. The average selling price takes the number right in the middle. For example, if you have 11 homes to use in your stats, you would take the sixth home’s sale price. This leaves 5 homes selling higher and 5 homes selling lower. In this case, it was pretty close since the average sales price increase from January 2015 to 2016 was 9.69%. This shows that we didn’t have the average price skewed too much because of a sale that was too big or too small.

There are hundreds of ways to look at the same numbers, when referring to real estate, so be very careful to read the exact print of the exact numbers they use. When making comparisons, you’ll need to be absolutely sure that they both refer to the same types of properties, dates, etc. As the old saying goes… there are lies, lies, and statistics.

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