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Real Estate Spin: Its All Good (If We Knew What It Meant)

Frankly, I am getting a little tired of the spin that is being thrown at us seemingly every day about the changing real estate market. In the end, I think it erodes consumer confidence through confusion. This information needs to be delivered with with clarity.

The National Association of Realtors released their 2006 market forecast yesterday [NAR] [1] which was chock full of information. However, this type of press release has been bothering me for quite a while, if not for most of the duration of the housing boom.

The use of clear and concise language is important to accurately inform those whom you are trying to reach. The press release from the NAR [1] says:

Historically Strong Home Sales Expected in 2006

Ok, quick tell me what this means?

A) Rising sales prices?
B) Rising number of sales?

(answer: B)

Sales activity in 2006 is expected to be the second best year in history

Ok, so it sounds like an incredible year for real estate is ahead of us.

…market conditions are still favorable for housing. “The slowdown amounts to a tapping of the brakes on a hot market,” said Lereah. “Home sales are coming down from the mountain peak, but they will level-out at a high plateau – a plateau that is higher than previous peaks in the housing cycle. This transition to a more normal and balanced market is a good thing.”

Wait a second…2006 is supposed to be the “second best year in history” but its going to be more normal and balanced?

Can’t we just read this as something like: The number of housing unit sales is supposed to drop slightly this year yet will still be the second highest in history. Housing prices are expected to see more modest increases this year as compared to last year.

Remember: Strong sales = high number of transactions