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Don’t You Love Real Estate Forecasting?

L sent me an Arizona Republic article on Phoenix New Home Sales over the weekend.  The article gave the latest numbers for home sales in the Valley.  Here’s the historic data:

Average number of new houses sold per subdivision in September 2012: 2.5.

Average number of new houses sold per subdivision in September 2011: 1.8.

So what is their forecast?

Forecast for number of new houses to sell monthly in each subdivision: 4.2.

In basic statistics we are taught about a standard distribution being a bell shaped curve.  In real estate forecasting it seems that the standard graph is always the hockey stick, regardless of the trend the historical data seems to have.

Published inBlog PostsPhoenix Market

3 Comments

  1. Russ Russ

    Interesting stuff. Regardless of statistical models, it is great to see that they are getting these subdivisions building again (note: sarcasm) It is not like there are all sorts of empty houses in foreclosure or pre/post REO limbo throughout the Phoenix. And the figures in this other article about the majority of rentals in various neighborhoods being owned by a handful of corporate players is interesting, if accurate.

    http://www.azcentral.com/business/realestate/articles/20121005phoenix-housing-investors-market.html

    • Maybe the people doing the forecasting are eternal optimists!

  2. Stats are great when you are looking back to compare sales or sum up the activity of the year. However, forecasting is IMPOSSIBLE. Clients ask me all the time where the market is going, however, if all of us realtors just knew, our job would be a lot easier :-)

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