Lies, damned lies and statistics in Cambridge

Frustrated by the inaccuracies of so many real estate “statistics”, the first article I wrote for the Marblehead Reporter in 2008 was Lies, damned lies and statistics. My goal in Oliver Reports is both to report on numbers in real estate and explain their significance – or not. There is nothing I find more frustrating than seeing a number reported without context and without understanding from the writer. Which takes me to Lies, Damned Lies and Statistics in Cambridge.

And in case you are wondering, my blog guide tells me I have to include the headline in the first paragraph of the report in order to be picked up by search engines.

I naturally read the Boston Globe’s How hot is the Boston real estate market? article with interest and my eyes popped out when I read this: “Cambridge’s Inman Square was No. 1 on the list, according to Seattle-based Redfin, with a $660,000 median sales price and homes going for 68 percent over the asking price.”

68 per cent over asking price? Holy Batboom, as Robin might have said. By the way, note that the article did not quote any numbers or timeframe.

So I looked at the numbers for sales in Cambridge in 2015. OK that’s not just Inman Square, but I thought it would give me a guide to the market in 2015. And what did I find?

111 sales of Single Family Homes (SFH) have been recorded in MLS. The largest premium over list price was 59% and there were 13 (12% of the total) in all that sold at a premium of 20% or more. On the other hand, 42 (38% of the total) sold at or below list price.

And the average premium for all 111 sales? Just 6%.

But maybe the writer was referring to condos (the writer only mentioned “homes” with no definition) so I looked at these. Here there were 591 sales and the highest recorded premium was 56%. 27 of the sales (5% of the total) achieved a premium of 20% or more, but 207 (35% of the total) sold at list or below.

And the average premium for all 591 sales? Just 5%.

The moral of this story? If it sounds too good to be true it probably is. And whenever anybody quotes numbers to you, make sure to ask the context.

If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.

Read Which broker should I choose to sell my house?

Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated

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