Oops, They Did It Again

Another month, another completely misleading chart published by the LVRJ.

In this morning’s paper, the number one most misleading chart in Las Vegas real estate:

image

This is the chart that caused me to start Frothing Developer. This is the “I’m mad as hell and I’m not going to take it anymore chart”.

The only way you can come up with this is if you take the enormous number of units that went into contract in May, along with the enormous number of units that went into contract in April, and March, and count them as available inventory.

I have argued before why this is nonsense. A unit is not “available” if someone else has it under a binding contract.

What REALLY happened in May?

The only ACCURATE metric of available inventory is the count of the homes that you can actually go out and buy. This is represented in the GLVAR database with one of two status codes “EA” and “ER”.

The count for EA and ER on May 1 was 22,719. The count on May 31 was 22,329. 3 days later it had dropped to 21,914.

So inventory in May actually dropped by nearly 400 units.

This is the actual chart of inventory in Las Vegas, when you strip out units in contract.

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One Response to Oops, They Did It Again

  1. Kevin says:

    This is a great post. These guys have to sell papers, but I think it goes deeper than that. I think people by nature want to follow the crowd. It is safer and even though everyone will tell you they are a “maverick” and will go their own way, that is simply not human nature.

    Guys will always talk a good game, but when it is their name on the line and their reputation, people look at the downside of going against the grain and see it very big. The upside of being right, when going against everyone else, is simply “nice job, but why do have to disagree with everybody all the time?” That is not a good upside.

    Great posting and I will keep reading. I am putting you in my blogroll so as I grow readers, they are getting the true story about our market.

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