Concerns Sorrounding Media Real Estate Statistics
Are statistics and metrics the be-all and end-all of smart real estate investing? After all, how often have you been told to follow the hard data? There is some logic behind this strategy. Hard numbers are a great way to evaluate a potential deal. However, those numbers must be right for them to work in your favor. So why would any savvy real estate investor choose to ignore them? Media statistics come with some concern.
Measuring metrics, watching the data and being alert to statistical changes is incredibly important in real estate industry. In fact, ignoring these numbers is just madness for any one that wants to succeed. Metrics and stats are the foundation of any good deal. Enthusiasm and hustle might help you realize some pretty impressive short term results, but those that ignore data will see an equally sharp fall.
It is no secret that some media outlets present a biased opinion. When it comes to main stream media, publications often fail to back up the numbers with hard facts and genuine research. Published content, which is paid for by parties with specific agendas, is intended to influence a respective market. How can you be sure what they are telling you is the truth?
With that being said, preform your own due diligence. The savviest real estate investing pros know how to balance out this information by accounting for other factors which can skew statistics. The more you know, the better you can process information presented by the media.
How can these views impact real estate investing?
On the surface, numbers indicate that median new-home sale prices in San Diego have hit an all-time high at nearly $700k. However, skewing the headlines are several factors. The available inventory of new homes in San Diego County were at a record low during the same period. That median price mentioned above doesn’t matter much if only high end homes were being sold at that time. In other words, while the San Diego real estate market is certainly strong and home values are growing fast, they still have a long way to go.
Inventory levels can be one of the primary deceiving factors, and have been over the last six years. Investors need to keep an eye on what’s really in the pipeline and not being publicly promoted.
Foreclosures continue to mess with real estate statistics all over the country. They mess with appraised values and mortgage LTVs, with average home prices, available inventory pools, and future values. Recognize how they are affecting the markets you are targeting and dig into raw bank data.
Real Estate Marketing
Marketing statistics can be as misleading as real estate headlines. The may rarely be on purpose, but more due to the fact that there are simply so many factors involved. For example; it’s easy to say that those that have real estate blogs see 67% more inbound leads. Of course, if you have a horrible looking blog, you might night see new leads coming in. Again, there are so many factors involved with real estate marketing trends that it is nearly impossible to gauge statistics. Find out what works for you and stick with it.
‘Trends’ are another tricky factor. Is it really a trend, or is someone just trying to make it trendy? Is it a growing long term pivot with no going back? Just like marketing, there are so many factors that influence trends, it can be difficult to delineate between useful data and that which is obsolete.