Was a big-time Sixth Avenue media giant flim-flammed by a Gilbert, AZ, housewife, nom de guerre “Twist,” who has set herself up as an authority on the residential real estate market and its feverishly-sought collapse? From BusinessWeek Online’s Hot Property:
In Phoenix, the numbers seem to go kerflooey every December. In December 2005, the number of houses that were withdrawn from the market plummeted to just 87, from 3,673 the previous month and 5,882 the month after. (Twist defines withdrawals to include listings that are expired, withdrawn, pending, or temporarily off the market.) In December of ’04 in Phoenix, withdrawals declined so much that they supposedly went negative–specifically, a negative 1,234. Of course, there is no such thing as a “negative withdrawal,” so this has to be some kind of bookkeeping fudge.
As it turns out, the only thing wrong with this is everything.
I have no idea why we’re talking about November and December of 2005 and January of 2006, but these are the actual numbers for Expired, Cancelled, Sale Pending and Temporarily Off Market listings from those months, as taken this afternoon from the Arizona Regional Multiple Listings Service, the MLS system for the Phoenix area:
November 2005
Expired: 1021
Cancelled: 2444
Pending: 1
Temporarily Off Market: 1
Total 3467December 2005
Expired: 2134
Cancelled: 2218
Pending: 2
Temporarily Off Market: 1
Total 4355January 2006
Expired: 1568
Cancelled: 2582
Pending: 3
Temporarily Off Market: 6
Total 4159November 2004 (amended to orignal post for completeness)
Expired: 640
Cancelled: 1200
Pending: 0
Temporarily Off Market: 0
Total 1840December 2004
Expired: 1062
Cancelled: 1001
Pending: 0
Temporarily Off Market: 2
Total 2065January 2005
Expired: 605
Cancelled: 1363
Pending: 1
Temporarily Off Market: 3
Total 1972
Why are so few homes listed as Sale Pending or Temporarily Off Market? Because the status of those listings has changed in the intervening months, most of them to Sold.
I have no idea what “Twist” was failing to measure, but a Realtor would only be concerned with Expired and Cancelled listings, recognizing that the other two categories are nebulous and subject to change.
And, obviously: Bubble bloggers are notoriously reckless with numbers. They have an agenda, so they tend to throw out any data that do not fit their preconceptions. I have no idea if that’s what has happened here, but I can’t see any way for “Twist” to have made an honest error.
The story goes on to make similar claims about bogus MLS data in Tucson and Las Vegas. I have no way of checking those numbers (nor, I’m sure, does “Twist”), but my presumption is that they are as accurate as can be expected. Realtors in those markets might confirm that this is so.
Says “Twist”:
The more I look at it, the more I realize how horrifically fuzzy the numbers are. The MLSes weren’t set up for data-reporting purposes.
Wanna bet?
Further Notice, Friday, 01/05/07, 8:45 am PST: Peter Coy at BusinessWeek just phoned. We discussed the numbers shown above and he has elected to pull BusinessWeek’s post subject to further verification.
An important point that I raised in email with Peter this morning:
Regarding this:
“this has to be some kind of bookkeeping fudge”
A “fudge” would be a huge undertaking, essentially rewriting the software to exhibit anomalous behavior in December. This would be instantly obvious to thousands of Realtors — many of whom track cancelled and expired listings for a living.
Technorati Tags: blogging, real estate marketing
Kris Berg says:
I can’t figure out what in the world they are talking about or what point they are trying to make. That was just a monumental waste of two minutes of my time. Must be a slow news day.
January 4, 2007 — 3:57 pm
Greg Swann says:
> I can’t figure out what in the world they are talking about or what point they are trying to make.
Proposition one: Month after month, MLS results put the lie to the insanely hyperbolic claims of the bubbleheads. Ergo, try to debunk the MLS.
Proposition two: “Twist” is bad at math.
Both could be true.
January 4, 2007 — 3:59 pm
Melanie Narducci says:
On our mls there are some data quirks; new condo buildings will only enter a couple of their units and thus their total sales don’t figure into the mls, agents make inputting mistakes — garbage in, garbage out — and listings from all over the State show up on our San Francisco mls skewing our numbers a bit.
January 4, 2007 — 5:05 pm
NYCJoe says:
Methinks thou doth protest too much.
And, obviously: Bubble bloggers are notoriously reckless with numbers.
I’m not sure I agree. What evidence do you have to suggest that, other than this particular post from “Twist”, this covers all “bubble bloggers”?
My experience is that most of these bloggers merely republish existing stats (along with their own brand over varying color commentary) as reported by government agencies, banks, loan companies, publicly traded companies in the real estate and construction industries, and realty agencies. Even Keith over at housingpanic, arguably the worst demagogue out there, doesn’t publish his own stats (or at least hasn’t that I’ve found), and he doesn’t need to – there are more than enough public sources for this data.
Many of these sources are published by entities that are publicly verifiable, unlike the MLS.
They have an agenda, so they tend to throw out any data that do not fit their preconceptions.
Everyone has an agenda. Are we supposed to believe that people who sell real estate for a living and operate their own blogs don’t? Bloodhound is somehow an island refuge of unbiased reporting amongst a sea of bubbleheads?
And what exactly is Twist’s agenda, anyway? From the look of things, her blog wasn’t started until June of 2006, well after the market trend was already flat and trending downward.
Wanna bet?
I realize you were be rhetorical, but how would one collect on such a bet? The MLS is not open to verification by outside sources, at least not that I know of.
January 4, 2007 — 5:45 pm
John L. Wake says:
Greg,
Your numbers are exactly right.
KIDS, DON’T TRY THIS AT HOME.
It’s super easy to get confused when using the ARMLS program to generate statistics. At least she wasn’t trying to do something important like run a CMA.
And I agree totally with Kris, “Why!?”
I guess to try to show how Realtors are manipulating the data, the entire real estate market, and probably know where Jimmy Hoffa is.
January 4, 2007 — 6:02 pm
Jay Thompson says:
?????????????
“The MLSes weren’t set up for data-reporting purposes.”
Uh…. um…. the MLS’s are pretty much nothing but a data base. Last I checked, data bases were actually quite useful for data reporting.
What am I missing here?
(I extracted the data too. Even tried juggling entire towns and suburbs and I couldn’t get to anything close to “Twists” numbers.)
January 5, 2007 — 12:40 am
Ken44 says:
The Phx metro inventory has begun moving upward:
01/01: 48,213
01/03: 48,621
01/04: 48,695
Is this rise in inventory expected to continue?
Thanks
January 5, 2007 — 2:05 am
Robert Cot says:
Twist: The more I look at it, the more I realize how horrifically fuzzy the numbers are. The MLSes weren’t set up for data-reporting purposes.
Bloodhound: Wanna bet?
Sure I’ll take that bet. I cite as my source Greg Swann who says; “…the other two categories [pendings and temp off mkt] are nebulous and subject to change.”
Now all you need to do to collect is refute that other Mr. Swann and open up the MLS to scrutiny. How long shall we wait?
Since you seemed to miss her point BECAUSE she is a blogger critical of Real Estate practices why is the same point glaringly obvious o you when it is your own observation; “the other two categories are nebulous and subject to change?” If the complaint is bias in the blogosphere there’s a place closer to home where you can start doing some good.
January 5, 2007 — 8:20 am
Geeski says:
As always, interesting.
I think Twist deserves props for the analysis. Statistical analysis is what she does, so I don’t see how realtors can tarnish her abilities or results. Also, Twist has no need for an agenda, other than to present data. The realtors on the other hand, clearly have an agenda. Their earnings depend on the constant, positive cheerleading to say that now is the best time to buy. I don’t think realtors are in the same class. No offense, but when one reads MLS listings, the typographical, grammar, and usage errors made by realtors are embarrasing. You cannot spell, but you now want us to believe that your mathmatical skills are superior. That is for to laugh.
January 5, 2007 — 8:22 am
Otto says:
As someone above says, everyone has an agenda.
One of my observations regarding realtors is they tend to be intellectually challenged and dishonest. A lethal combination as these attributes will allow you to fudge data without actually realizing it.
Anyone who uses the MLS as a source of data is just plain stupid.
January 5, 2007 — 11:15 am
Kris Berg says:
Looks like Business Week pulled the post pending further investigation.
January 5, 2007 — 4:54 pm
Greg Swann says:
> Looks like Business Week pulled the post pending further investigation.
Me, this morning:
Further Notice, Friday, 01/05/07, 8:45 am PST: Peter Coy at BusinessWeek just phoned. We discussed the numbers shown above and he has elected to pull BusinessWeek’s post subject to further verification.
An important point that I raised in email with Peter this morning:
January 5, 2007 — 5:09 pm
Robert Cot says:
Greg,
GIGO. It does not take a software rewrite to fudge the data. “Go home early, it’s Christmas” would be enough. You know this and while the discrepancy needs to be explained your proffering only one explanation when you full well know others at least as likely are possible is not shedding light only blowing more smoke.
January 5, 2007 — 6:29 pm