There’s always something to howl about.

Twisted minds: Was BusinessWeek bamboozled by bubble-blogstress?

Was a big-time Sixth Avenue media giant flim-flammed by a Gilbert, AZ, housewife, nom de guerre “Twist,” who has set herself up as an authority on the residential real estate market and its feverishly-sought collapse? From BusinessWeek Online’s Hot Property:

In Phoenix, the numbers seem to go kerflooey every December. In December 2005, the number of houses that were withdrawn from the market plummeted to just 87, from 3,673 the previous month and 5,882 the month after. (Twist defines withdrawals to include listings that are expired, withdrawn, pending, or temporarily off the market.) In December of ’04 in Phoenix, withdrawals declined so much that they supposedly went negative–specifically, a negative 1,234. Of course, there is no such thing as a “negative withdrawal,” so this has to be some kind of bookkeeping fudge.

As it turns out, the only thing wrong with this is everything.

I have no idea why we’re talking about November and December of 2005 and January of 2006, but these are the actual numbers for Expired, Cancelled, Sale Pending and Temporarily Off Market listings from those months, as taken this afternoon from the Arizona Regional Multiple Listings Service, the MLS system for the Phoenix area:

November 2005
Expired: 1021
Cancelled: 2444
Pending: 1
Temporarily Off Market: 1
Total 3467

December 2005
Expired: 2134
Cancelled: 2218
Pending: 2
Temporarily Off Market: 1
Total 4355

January 2006
Expired: 1568
Cancelled: 2582
Pending: 3
Temporarily Off Market: 6
Total 4159

November 2004 (amended to orignal post for completeness)
Expired: 640
Cancelled: 1200
Pending: 0
Temporarily Off Market: 0
Total 1840

December 2004
Expired: 1062
Cancelled: 1001
Pending: 0
Temporarily Off Market: 2
Total 2065

January 2005
Expired: 605
Cancelled: 1363
Pending: 1
Temporarily Off Market: 3
Total 1972

Why are so few homes listed as Sale Pending or Temporarily Off Market? Because the status of those listings has changed in the intervening months, most of them to Sold.

I have no idea what “Twist” was failing to measure, but a Realtor would only be concerned with Expired and Cancelled listings, recognizing that the other two categories are nebulous and subject to change.

And, obviously: Bubble bloggers are notoriously reckless with numbers. They have an agenda, so they tend to throw out any data that do not fit their preconceptions. I have no idea if that’s what has happened here, but I can’t see any way for “Twist” to have made an honest error.

The story goes on to make similar claims about bogus MLS data in Tucson and Las Vegas. I have no way of checking those numbers (nor, I’m sure, does “Twist”), but my presumption is that they are as accurate as can be expected. Realtors in those markets might confirm that this is so.

Says “Twist”:

The more I look at it, the more I realize how horrifically fuzzy the numbers are. The MLSes weren’t set up for data-reporting purposes.

Wanna bet?

 
Further Notice, Friday, 01/05/07, 8:45 am PST: Peter Coy at BusinessWeek just phoned. We discussed the numbers shown above and he has elected to pull BusinessWeek’s post subject to further verification.

An important point that I raised in email with Peter this morning:

Regarding this:

“this has to be some kind of bookkeeping fudge”

A “fudge” would be a huge undertaking, essentially rewriting the software to exhibit anomalous behavior in December. This would be instantly obvious to thousands of Realtors — many of whom track cancelled and expired listings for a living.

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