Sales PLUNGED! Or Did They?

When are statistics not really statistics?

Mark Twain is famously attributed with the quote: “There are three kinds of lies: Lies, Damned Lies, and Statistics”

So, when is a statistic so misleading that it becomes irrelevant when placed in context?

Yahoo! Finance and Redin both breathless report that home sales PLUNGE, citing the unit count declines of 25-30% in most markets.

Well, that sounds bad. But what does it really mean?

Then they put in a graph...it must be true....

That looks scary, look at that PLUNGE!

It is true, unit sales or the number of homes sold have declined, but declined compared to.....????

For example, while sales went down in August, this is after almost 2 years of record sales in unit count, which may mean that many homebuyers that would have bought last month have already purchased over the past few years of the once-in-my-lifetime event called the COVID or pandemic.

I think the term plunge is used to make seller's fearful that prices have plunged, which has not happened in the market overall.

Keep in mind, however, that prices have risen dramatically, in fact on average about 40% over the past 2 years. The result is that the lower units sold result in what would have been record sales volume prior to the pandemic.

The is clear when you look at the continued increase in the sales price per square foot, which has also increased about 50% during this period.

ALL THAT SAID, let's not overlook that mortgage rates JUMPED over .50% this week, and most buyers don't even know it yet.