Hooray – an article from the Post that is SO useful in interpreting the doomsday real estate stats–and also the overly optimistic ones–that we read about. It dives into detail on the methodology of two housing reports released two days apart: one from OFHEO that claims a 1.2% price increase for the year, and another from S&P claiming a 7% drop.
The headlines might as well read: Lies, Damn Lies, and Statistics. The moral of the story being that anyone who understands anything about data can twist it to say just about anything they want (as an ex-consultant, I know this applies to other fields, not just real estate!)
The article is very insightful and points out that neither stat is completely representative. As usual, the truth probably lies somewhere in between. The author hits the nail on the head in the last paragraph:
Don’t overreact when you see big drops — or jumps — in these indexes. They are measuring different things, and no national index gets down to the nitty-gritty: what’s happening to property values in your Zip code, micromarket or neighborhood.
All the more reason to talk to a Realtor when you’re thinking about buying or selling–what you read is only part of the story!