It is a FACT - ALL REAL ESTATE IS LOCAL. Agents know. Will anyone listen???

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

It is a FACT - ALL REAL ESTATE IS LOCAL.

Beginning with the introduction, ACTIVERAIN moves into the business of national real estate market statistical reporting:  "The largest real estate social network ActiveRain Corp surveyed 1,835 real estate agents and real estate brokers in the US and Canada to understand if the real estate market and economy are poised for recovery in 2012, both nationwide and in local markets."

SEE:  Real Estate Recovery Or Not? 2012 Predictions by the Pro's Infographic by ActiveRain.

OPINION vs. FACT BASED REPORTING:  I am of the opinion that statistical reports compiled by opinions of a small number of real estate agents has no significant value in terms of accuracy.  Opinion is not data.  Accurate statistical reports may be compiled with the use of data.  However, that may also be manipulated.

That said, while the sampling is far too small to have national significance, it is interesting to see a report using real estate agents as the source.  We do, after all, live in these markets and experience the effects of the forces that move markets for good or bad.

My first thought on reading the report was, "Mmmm, is ActiveRain moving into the sphere of National Real Estate Market Forecasting??"

If so, compiling and publishing these reports may have some national significance, although the opinions of the average real estate agents has, to date, largely been ignored.  So, even a small sampling is interesting reading.  Agents also have access to real estate facts through the data contained in our MLS systems.  When I compile statistical reports from my MLS, it's based on FACTS of actual closed sales, current listings, etc.  There is no opinion involved.  Which leads me to the question of "How did the NAR get it so wrong".  I've yet to figure that one out. 

CROSS MARKET AVERAGING.  Another problem I note with most published real estate reporting by national companies is cross market averaging.

EXAMPLE:  Washington D.C. is not one market.  It is a geographical area combining several states and numerous counties of which all represent diverse real estate markets.  I have yet to see an accurate published report of any real estate market for Maryland or Northern Virginia.  Until or unless the data used is county originated, it is virtually useless.

THE OPINIONS OF ACTIVERAIN REAL ESTATE AGENT MEMBERS has value.  We are at the source.  We live the dynamic relationships between agents and real estate services consumers. 

I have yet to see a home buyer or seller make a real estate transaction decision based on a National Statistical Market Report.  Sadly, some of the most prominent web sites used by consumers also contain the highest percentage of innacuracies.  Yet, consumers rely on the reports because they have no understanding of how the reports are compiled and, to a consumer, "if it's published, it must be right". 

WHAT DO REAL ESTATE AGENTS THINK?   I believe that, if limiting their opinions to their individual market places, opinions by even a small sampling of real estate opinions will be more accurate than the existing national reports seen on the Internet and relied on by marketing companies, real estate publications and the Congress of the United States.  Our opinions have value even though we have no national voice.  If ActiveRain can make our voices heard, that would be an important force in real estate reporting.  "What do real estate agents think?" could be an important question. 

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.  Serving home buyers in Maryland and Northern Virginia where each state and each county is a different real estate market place.

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  1. Charles Stallions 02/25/2012 11:17 AM
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Show All Comments
Rainmaker
145,617
Judi Monday
RE/MAX Valley Properties - Green Valley, AZ
CRS-Green Valley AZ Expert, Green Valley Arizona R

Real estate is definitely local and it is a lesson I teach on a daily basis especially since more 90% of our Buyers come from somewhere else to either buy a second home here or their reitrement home.   As a result our demographics are different than most other areas and thus the trends are unique to our area. 

Feb 23, 2012 07:31 AM #52
Rainer
96,502
Larry and Marilyn Mennetti
FIVE STAR REAL ESTATE - East Grand Rapids, MI

REAL ESTATE IN MY AREA IS NEAR MICRO LOCAL....WE HAVE SO MANY DIFFERENT AREAS WHERE HOME PRICES FELL ON THEIR BUTT AND OTHERS THAT HARDLY FELT THE TURN DOWN. IT CAN'T BE EXPLAINED AWAY BY A NIGHTLY NEWS CAST FROM NBC OR FOX ETC....IT IS TOO "COMPARTMENTALIZED" FOR THAT. AND OUR BUYERS AND SELLERS WHO RELY ON ZILLOW, TRULIA AND THE LIKE FOR VALUES ONLY FOOL THEMSELVES. THEY WOULD DO WELL TO COMPARE ZILLOW'S ZESTIMATE WITH ACTUAL MLS SOLD PRICES TO SEE HOW WRONG THEY ARE ....MAYBE THEN THEY WOULD UNDERSTAND THAT ZILLOW TAKES IN TOO WIDE AN AREA TO AVERAGE. A GATED COMMUNITY CAN BE PUT INTO THE POT WITH AN OLD SUBDIVISION OF HOMES AT LESS THAN 10 PERCENT OF THE VALUE OF THE GATED AREA....WHAT DOES THAT DO TO THE ACCURACY OF THEIR PRICE?  

GREAT POST LEN!!!

Feb 23, 2012 07:37 AM #53
Ambassador
899,837
Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

Real Estate in the lower Fairfield County area is completely local, and I like the saying - "micro-local" - each side of a town is different, and the next street over will be different.

Feb 23, 2012 07:57 AM #54
Rainmaker
204,438
Woody Edwards
First Choice Realty, Inc - Chesterfield, VA
A Realtor® Who Answers His Phone!

Well written Lenn.  I consider myself a "statistical nut", and I almost choke when I read some of the numbers they try to push on us.  As my college statistics prof said, "Statistics are a bunch of numbers you put on paper to back up whatever you are trying to say!"  I rest my case!

Feb 23, 2012 08:19 AM #55
Rainmaker
332,268
Inna Ivchenko
Mannis Real Estate Group - Calabasas, CA
Los Angeles / Valley Homes

 Great discussion! I'd like to add a tiny point:  I would never argue with the statement that  local knowledge is essential for a Realtor who claims to be a 'local expert'  – but being local is optional in some situations.  If a buyer wants to go beyond one town into another( ~10 miles from my present hood), I can continue to help them. i lived and worked in many cities of LA and Valley. 

Feb 23, 2012 09:41 AM #56
Rainmaker
332,555
John DL Arendsen
ON THE LEVEL General Contractor, Crest Homes Factory Built Housing Dealer & Developer & TAG Real Estate Sales & Inves... - Leucadia, CA
Contractor, RE Brk, Factory Built Home Dealer/Devl

Personally, I've never referred to any type of statistics to run any of my businesses since I've been in business for the past 45 years. But then I guess that's the advantage of being a small businessman. As usual good info. Thanks Lenn.

Feb 23, 2012 10:05 AM #57
Rainmaker
226,959
Michael Blue
Home Smart Realty West - Encinitas, CA
REALTOR - 760-889-8877, Encinitas/Carlsbad

Huh!! Is there real estate outside of SoCal?  I'm always learning, thanks Lenn.

Feb 23, 2012 10:55 AM #58
Rainmaker
314,304
Larry Estabrooks
a Fully Independent Real Estate Agent - - Moncton, NB
REALTOR®, Moncton, NB

Statistics allows one to report what happened in the past month, quarter, year, et cetera.

I suggest that forecasting and predicting is opinion, educated guess at best and not always relative to past statistics.

Feb 23, 2012 12:12 PM #59
Rainmaker
718,425
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

Hi Lenn, I find that most people in my area listen to the national numbers and think those numbers reflect the market here. I always tell them real estate is local and always will be. Some areas are doing very well, while other areas are not.

Feb 23, 2012 12:34 PM #60
Ambassador
2,390,958
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Dan.  Indeed and it takes experience.

Katerina.  Same thing here.  When gas went up 4 years ago for the first time, real estate in the outer suburbs died.  Now, it's dying closer in.

However, new homes close in are booming.

Anna.  First time home buyers are trying here, but they don't qualify for much and half of them have questionable credit.

Amanda.  HA!  I've been fighting Z for many years.

Judi.  Most of our buyers are local.  I'd love some incoming buyers.

Larry.  Zillow is fatally flawed in their design.

Dagny.  Same here in some communities.

Woody.  I have yet to see a national stat that had any value.

Feb 23, 2012 02:37 PM #61
Ambassador
2,390,958
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Inna.  I too will travel a great distance to help a buyer.  My post was related to "national stats" compiled by experts who do not know our market.

You and I know our markets quite well, which is how I know how worthless the national stats are.

John.  The national experts don't know small local areas.

Michael.  You're doing a good job sticking to what you know.

Larry.  Yet they continue to forcast.

Jackie.  Keep telling them.  We have no choice.

Feb 23, 2012 02:44 PM #62
Rainer
283,216
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Kimo's Lifestyle Solutions

The report is simply a talking point topic and may or may not be relevant to your market. I don't think any professional would ever use a national report regardless of the statistics to use in their own marketing area, since all real estate is local.

Feb 23, 2012 07:16 PM #63
Rainmaker
1,262,937
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Although when buying or selling local markets are the key, national trends and markets are an over all indication of our economy and will also impact how the government meddles in the housing market.

Feb 23, 2012 08:44 PM #64
Ambassador
2,390,958
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Gene.  You are absolutely right.  That said, the governmeddling is so often wrong because of their reliance on national trends.  To date, the government has no knowledge of my market.  They persist in believing that MD/VA/DC/WVA are ONE MARKET. 

Kimo.  Their talk isn't as much the problem as the fact that they listen only to each other.

Feb 24, 2012 02:52 AM #65
Rainmaker
359,193
Sylvie Stuart
Keller Williams Check Realty 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagstaff, AZ

Real estate is absolutely local. People like to see reports, but there are so many ways to manipulate reports however you want, you'll certainly get a wide variety of information with opinions. It's still interesting to see what agents are thinking.

Feb 24, 2012 06:13 AM #66
Rainmaker
24,115
Brenda Van Fossen
Dawson Ford Garbee & Co., Realtors, Lynchburg VA - Lynchburg, VA

Great post!  I am in Lynchburg VA and our market is improving.  We were behind the curve here--late to see foreclosures and reduced home values and late to start to recover.  Yet I have people condoling me for being in real estate right now.  Of course, I enlighten them.  We need to do more locally to educate the consumers about our local market.  Heaven knows the Nightly News is telling them how bad things are based on Las Vegas' stats!

Feb 24, 2012 08:23 AM #67
Ambassador
2,390,958
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Sylvie.  Manipulating data to generate a favorable report risks losing the trust of a client.

Brenda.  Don't folks realize the investment we have in our business.  Not easy to just walk away, especially when we're older than dirt.

 

Feb 24, 2012 12:36 PM #68
Rainmaker
636,109
Stephanie/Bob The Ruiz/Miller Team
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Lenn, great points.  And that is what I tell people when they say "well Zillow says!".

Feb 24, 2012 04:30 PM #69
Rainmaker
818,638
Paula McDonald
Chevaux Group, PLLC - The Woodlands, TX
CHEVAUX Group ~ The Woodlands, TX 936-203-0279

Yes. The local market experts are the ones in the trenches and therefore have the most credibility.  

Feb 27, 2012 07:03 PM #70
Ambassador
2,390,958
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Bob.  Explain to them how Zillow comes up with their valuations and they understand.

Paula.  Hopefully we do.  If there is some trust, we'll overcome the blather from Zillow.

Feb 28, 2012 03:58 AM #71
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Ambassador
2,390,958

Lenn Harley

Real Estate Broker - Virginia & Maryland
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