Last week the News Press ran a story about the rebounding housing market and they used inventory stats that said the single family inventory is down to 13,897 in Lee County, down from 14,113 the month prior. The only problem is, they were looking at the chart wrong as those were cumulative inventory numbers, not current.

It was an easy enough mistake if you don’t study those numbers on a regular basis. The chart should have quoted 3,579 single family homes on the market, but even that number isn’t the best number, and we’ll explain why.

I sit on the MLS stats committee and for the last year or so we’ve been working hard on cleaning up the data and defining how listings should be classified to best reflect what’s actually happening in the market. Look for inventory levels to increase because of this change.

In the past inventory numbers only reflected Active listings that were not Active Contingent Short Sale. In other words, agents were still taking offers to present to the bank or as backups until the banks accepted a short sale offer but it wasn’t being counted. At the point a bank accepts a short sale offer the property was to be placed pending, like a normal sale would be.

A high degree of pending sales actually close, but the same cannot always be said for Active Contingent sales, especially short sales. Another reasons aside from being a short sale a property could be listed as Active Contingent would be if something else has to happen first, like a buyer selling another property before they can close.

In this case a listing agent may mark the property Active Contingent and insert a Right of First Refusal clause and continue to market the property. To me, this property is still an active listing and should be counted in inventory. From now on it will.

It’s easy to count and search for sold properties in MLS, but it’s much harder to go back and search for active listings from the past on a certain date unless you have frozen copies of the database. Because of this, the Board of Realtors cannot post what the active listings would have been under the new guidelines since they weren’t searched that way at the time.

Some on the committee pondered whether it would be easier to just keep the status quo since we didn’t have that data. Most of us preferred to rectify and make the most accurate possible, even if it meant postponing the revisions to past inventory levels until we have a new baseline to present. Everyone on the committee concurred once the tough decision was made to make it right, even if it would cause some heartache and confusion for a few months.

Personally I’d rather take the tough steps now to get the most accurate statistics to agents and the general public, and the committee and the Board agreed.

Housing Numbers Becoming More Reliable

I feel much more confident going forward with the data that will be provided. All the definitions will be posted and any agent should be able to duplicate the data, something that wasn’t possible in the past. This will provide for full transparency and credible data, and should eliminate various sources from having differing standards and definitions.

While mistakes in the newspaper or anywhere else will always be possible, hopefully we’ve made some changes that will eliminate systemic errors. We still have the issue of various boards reporting separate data which can cause duplication in areas served by two nearby MLS’s, we can account for this within a consistent statistical deviation.

It really depends on whether the press is quoting one board or multiple boards as the source for their data, as some listing may appear in one board and not the other, and some appear in both.

I feel very confident in the new definitions presented by the Florida Gulf Coast MLS which will begin to take affect soon. In the meantime, we’ll continue to report the stats and inform you where we believe the numbers will change. Inventory numbers are low but will increase under the new guidelines.

We’ll talk about some of the new formulas in future articles that better reflect the SW Florida real estate market.

Good luck and Happy House Hunting!