Beware Real Estate Advertising Statistics

Almost exactly a year ago, I posted a note that showed how numbers could be manipulated in ways that were truthful but either unhelpful or misleading (or both) when it came to comparing individual real estate agents. Recently, the following advertisement comparing offices in Rhinebeck caught my eye; and I can’t resist discussing it in the same context.

BH_Ad2

The ranking and statistics as reported in the advertisement are correct. According to this advertisement, it’s “Good to Know” that a certain office in Rhinebeck had a larger dollar volume of sales than any other. But does that help a prospective house seller or buyer?

Number of Sold Units More Important than Dollar Value

If I were going to sell my house, I’d be less concerned with which office had the most business in dollars. I get that many dollars indicates a high level of activity. And many sales dollars generates many commission dollars. But does that activity benefit the individual seller? In terms of dollars, I might be more interested in how close sale prices were to listing prices.

More than that, however, I’d want to know which office sold the highest percent of its listings, because actually getting my house sold is my highest priority. And so I divided total number of sales by total number of new listings to derive a percentage. Based on that criteria, the Rhinebeck office ranking for 2015 changes quite a bit*:

Rank Office New
Listings
Sales Percent
1 Paul Hallenbeck RE 132 50 39
2 C21 A. Ferri 33 12 36
2 Berkshire 183 65 36
3 J. Ettenson RE 53 18 34
4 Northern Dutchess 72 24 33
5 H.H. Hill 60 13 22
6 Paula Redmond 59 12 20
6 Staley RE 60 12 20

Based on percent of listings sold, Rhinebeck has a different leader. Tied for second and alone in third, are two offices that didn’t even make the dollars list. A third office is added to this group because it is statistically even for the number 6 ranking.

Success Rate of Individual Agents More Important than Office as a Whole

The office that supports your prospective agent is a valid consideration. But does the sheer number of office sales mean that much? I wonder which office contains the most productive individual agents because those agents — or one of them — will be primarily responsible for my listing. In the following table, I divide total new listings and total sales by the number of agents listed for each office in the MLS roster. Then I divide the resulting number of sales per agent by the number of new listings per agent to obtain a rank by percentage:

Rank Office Agents New Listings
Per Agent
Sales Per Agent Percent
1 Fraleigh & Rakow 3 4 2 50
1 G. DiMauro RE 5 4 2 50
2 Northern Dutchess 14 5 2 40
3 Berkshire 22 8 3 38
3 J. Ettenson 7 8 3 38
4 C21 A. Ferri RE 10 3 1 33
5 Paul Hallenbeck RE 9 26 6 23
6 H.H. Hill 4 15 3 20
6 Paula Redmond 4 15 3 20
6 Staley RE 3 20 4 20

Based on this ranking, we now have two new leaders among the Rhinebeck offices, neither of which appeared in the original advertisement or in my first table. Third and fourth spots still belong to two offices that did not make it into the original advertisement.

Focus Numerical Analyses on Individual Agents

Not only do I believe the numbers that reflect actual sales are more important and useful to prospective property sellers and buyers than sheer dollar amounts, I also believe that numbers pertaining to individual agents are more important than numbers pertaining to offices or brands. But even those numbers should be scrutinized, as I showed in last year’s post on Dutchess County sales numbers. To begin, each office is organized in unique ways and contains unique agents.

Imperative to Go Beyond the Numbers

Knowing that statistics can be massaged and manipulated, how does one choose a real estate agent? There are so many considerations — for now, I suggest that you Google “How to choose a real estate agent?’ As you read through the many pages that will come up, jot down the your concerns and the agent characteristics that matter to you most. Then have a conversation with more than one agent before you decide who to use. When presented with statistics always ask, what do these numbers really mean for me as I am considering this individual to help me buy or sell a property?

*Data sourced from Mid-Hudson MLS, the same source used in the advertisement. All fractions and percentages rounded to nearest whole number. Number of agents on roster comes from MLS at the time of writing.

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Thanks for reading. When you are ready to start browsing homes or land in Dutchess, Columbia, and Ulster Counties, I encourage you to do so at my websiteAsk-Marty.com. Because I am a member of THREE MLSs (Mid-Hudson MLS [Dutchess County], Ulster County MLS, and Columbia Greene Northern Dutchess MLS), you can search the entire region on both sides of the Hudson River. You can save properties that interest you and you can set the site to email you notices when new listings match your criteria. This a great way for buyers or sellers to monitor a specific neighborhood or school district or type of property!
Best wishes,

Marty

How’s the Market? — Conditions at the Start of 2015

It’s been a tough several years in real estate. The pattern of reduced sales and reduced prices is ubiquitous, both locally and nationally. Looking back, we can see the market crested around 2006, stalled for a while, then began its downward plunge through 2007 and 2008. The downward plunge leveled out around 2009, but there has been no great comeback in sales volume or pricing. We still have not returned to the prices of 2005 and 2006. Regional figures for 2013 and 2014 show a glacial market, with 2 or 3 listings for every sale; any signs of a thaw are tentative.

One ignores the market at his or own peril (especially with regard to decisions relating to price), but I think it can be a mistake to let the market be the principal driver of the decision to buy or sell a home. If your circumstances and goals make the sale or purchase of a property desirable now, you should consider acting now. Few of us expected the down market to last as long as it has, and I think that it is still as difficult as ever to predict even the shorter-term future. Buying or selling — there’s no guarantee that you will be able to get a better price next year. Still, understanding how the market is working today can yield certain advantages to buyers and, even in this slow market, to sellers.

In this blog category (How’s the Market?), I will focus on how buyers and sellers can use current market conditions to their advantage. At the same time, I am going to concentrate less than I did last year on weekly variations in market statistics while still describing major trends regionally. For now, let’s not kid ourselves; regionally, I think “glacial” is as good a word as any to describe the market pace. Anyone want to talk to me about how to use that news to their advantage? Please call!

All good wishes,

Marty

I Welcome Your Business & Referrals in 2015

I became a real estate agent in late 2006, encouraged to do so then by the widespread public perception that real estate was a booming business. My little joke around 3 years in was that “I had never known the good times,” but that has long since become a stale line. But I have persevered; I became an independent broker in 2011 and, despite the gloomy face of the real estate market generally, I have just finished my best year ever.*
With this note, I am asking for your consideration or your recommendation. I have shown consistently that I can get the job done — for buyers and sellers — even in this “interesting” market. As we enter 2015, you may well be thinking that this is the year you will buy or sell some property. Perhaps you are thinking of doing both. Or perhaps you know someone who is thinking of buying or selling — maybe a friend from downstate who has been contemplating purchasing a vacation home up here. I’d love to get a call from you, or from someone to whom you’ve mentioned me.
Please check out www-ask-marty.com. If you have the interest, you can set up searches to monitor listings in any part of Dutchess, Ulster, and Columbia Counties. I am one of a very few local brokers/agents who provide access to the listings of three contiguous MLSs — Mid-Hudson, Ulster, and Columbia Greene Northern Dutchess — on his or her own personal website. At my website, and also at my Facebook page (www.facebook.com/AskMarty), you can subscribe and comment on my own market commentaries.
* See related post “How’s the Market? Conditions at the start of 2015”

With thanks — and best wishes to all for a prosperous and healthy new year,

Marty