Ever heard the old saying, “statistics don’t lie, but liar’s use statistics”.
There is a classic example taking place in the news today.
Reports abound that “existing home sales are up 5% from January”, the biggest one month jump in ages. http://www.foxbusiness.com/story/markets/economy/existing-home-sales–february/ The reports are accurate and terribly misleading at the same time.
The reports are referring to sales of existing single family homes. To be fair the article provides a small disclaimer, the sales, disportortionately involve “distressed” or foreclosed homes”.
The reports also provide the following “statistic”: Annual housing sales (2009) were projected upward to 4.72 Million Units from previous estimates made in January.
Why is this report cynical at best and an example of “fudging the numbers” rather than “fair reporting” at the worse?
Because the reports fail to present the numbers in a Proper context”.
Why doesn’t the report compare February 2008 to February 2009. The “good news” being manufactured by the article doesn’t note that this months increase is related to the fact that last month, January 2009, was one of the worst months in history.
Secondly, the report doesn’t note that home sales always rise between January and February – last year and this year were no exceptions. It has something to do with the time of the year. Home sales always increase entering Spring and decrease in the Winter.
This time last year the Press saw no “hopeful signs”, or “trend”, in the increase between January and February – the increase was attributed to “lower home prices” – as you know, home prices are even lower this year, as are interest rates.
In 2008 the press reported: “The seasonally adjusted home sales figure was revised upward to 5.03 Million.” http://www.banks.com/blogs/mortgages/2008/03/24/existing-home-sales-rise-in-february/
Comparing February 2009 with February of 2008, there has been a drop of 9% in existing home sales. As we all know 2008 was a horrible year for sales and the just released numbers show an additional projected decrease for 2009.
In keeping with this month’s theme of March Madness, (I’m looking for an excuse to make an basketball analogy), compare today’s news report to the following hypothetical.
Game-end stats for your favorite team’s star player reflect he scored 3 points in the last contest, up from the 2 points he scored in the first Tournament game. A hefty 50% increase in offense. The 50% increase is worthy of reflection, but if the player’s season average is 19 points a game, what conclusions might you draw from the reflection. The 50% increase certainly isn’t going to guarantee him a “start” in the next game.
The “slanted” press reports today deny readers the opportunity to “reflect” and draw their own conclusions from the statistics being presented. To return to the Basketball analogy, a sports fan would want to know how many minutes the player played, whether he was injured or in foul trouble? The necessary information to put the report in context.
Today’s press reports on the housing numbers reflect an attempt to “slant the context” rather than comunicate an accurate picture.
I’m looking for good news as much as the next person, however, I’d like that news to be based on “reality” and not “wishfull thinking”. The housing numbers cointinue to be down from last years horrible numbers. February’s numbers are better than January’s. That is true every February – but the February 08 numbers did not signal a rebound in the housing market – neither do the February 09 numbers. Housing sales are still on the decline.
Lets hope a turn around is on the way and lets not misrepresent that one has arrived when it hasn’t.
Another gloomy but accurate statistic: Housing starts are down 47% from last year. http://www.reuters.com/article/domesticNews/idUSTRE52G1GP20090317
Isn’t the public entitled to the straight story?
Reminds me of another old saying, “Don’t believe everything you read in the paper”.
Filed under: Bailout, Banking, Banking Crisis, Economic Crisis, Economy, Energy Crisis, Financial Crisis, Housing Crisis Tagged: | February Housing Sales Actually Down From 2008, Housing Sales Up From Jan - Sales Still Down 9% From year Ago, Housing Sales Up? Or Down?