Change in Statistics Methodology
February 14, 2007
Note to the news media and others:
We have made a couple of changes in the way we generate our sales counts and median sale prices. These changes, which reflect the use of new tools that allow us to provide the best data possible, will take effect starting with our published January 2007 sales statistics.
The highlights:
Sales counts: Changes in our methodology to determine the number of sales transactions have resulted in a roughly 10 percent increase, on average, in our historical monthly sales totals. In most cases this has little if any impact on the year-over-year increase or decline in sales.
Median sale prices: The main change here is a switch from a so-called weighted median price to a straight median for our "all homes" category, which combines resale houses, resale condos and all new homes. On average, this change results in a roughly 1 percent difference in the all-home median sale price historically.
In addition, some of our other medians (for resale houses and new homes) have changed slightly because of various database enhancements. Again, these changes are mostly minor and do not alter historical trends.
More detail:
DataQuick Information Systems started collecting public record information in 1979. We started publishing statistics in 1989. For eighteen years we've used a tight "arm's-length" definition to distinguish valid sales from all the other real estate activity that we get from county recorder offices. DataQuick has enhanced the database significantly the past 18 years and we've decided to take advantage of the improvements
To count as an "arm's-length" sale for our sales counts, the logic we've used insisted that there be a seller, a buyer, and that money changed hands. We've now expanded this to include transactions where there was a purchase loan if no price was apparent.
We're also now including multiple sales transactions. If three homes were bought in the same transaction, we now count them as three home sales, not one sale. These changes increase monthly sales counts by an average of 10 percent. Intra-family transfers are not included, nor are foreclosures until a home is re-sold to a new buyer.
We have decided to switch to a straight median sale price instead of a weighted median when combining home categories (resale detached houses, resale condos and new homes), and when combining counties into regions. The result: our monthly "all-home" median prices have changed by about one percent on average. Why the switch? We use the straight median most often, including in work sold to the real estate industry, and we decided it's time to adhere to a single form of the median in all of our work. The difference between the two medians is usually slight, and the straight median - the point where half of the homes sold for more and half for less - is more easily explained and understood.
Media calls: Andrew LePage (916)456-7157 or John Karevoll (909) 867-9534
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