National housing data headlines are very often misleading – at best. At their worst, they drill into one of the harder to measure, but equally important factors impacting the nation's real estate markets: consumer psychology. In fact, if not for the reality that 99.9% of consumers buy a home for the sake of owning a home, improving their lifestyle and growing their families – three things you can't measure with numbers – I'd be willing to say that national housing data often does more damage to market conditions than good. Last week, we saw a classic example of this type of dubious headline shootout: The S&P/Case-Shiller Home Price Indices came out, indicating that home prices fell nearly 3% in the first quarter this year. This probably had some people scratching their heads if they were paying attention to the report from NAR released the week before noting that home prices continued to trend upward in April, climbing 10% compared to the same month a year before.
Upon closer look, it's easy to point out that the S&P/Case-Shiller numbers are quarterly, while NAR's numbers are monthly. It's also important to point out how each report is measuring price changes. For instance, NAR measures existing homes that sell each month and tracks the changes in median values, while S&P/Case-Shiller looks at the same home and measures how much it recently sold for versus how much it sold for the last time it changed owners.
These are two very different takes on data that gets lumped into the same thing in a news headline: home values. As we all know, not many people pay much attention past that headline.
In my experience, many consumers aren't that concerned with national statistics. However, paranoia and uncertainty about the market ensues after the last downfall and more people may be watching stuff like this than we think.
It's our job as real estate professionals to pay attention to these data headline discrepancies and proactively help consumers sort out what these numbers mean.
It's our job to reinforce the realities of our local markets. While these national data are painting two stories – one slow but steady recovery, and one that's not yet started recovering lost values – your local market may very well be tipping back into a seller's market. Indeed, some markets are back to multiple offer situations and are experiencing tight inventory, making it tougher to be a buyer than it has been generally in recent years.
Should we even pay attention to national housing data? Yes, to the extent that it's news and news travels. But I think we should pay even more attention to what's being left out of these news stories, and be prepared to help others understand.