We can’t change the past… not even if we try, really, really hard. And truthfully, how much can we ‘change’ the present? Sure, we can change how we do things personally, but we can’t change things on a macro-economical scale by ourselves.

The past is exactly that; past when we can do anything. But yet, many of the statistics we look at are past stats. In fact, the very definition of a statistic is something that has happened. Then why are we so focused on things like housing sales, and housing price? The answer is it’s easy. The answer is that it is DATA that is verifiable, and can allow us to measure where things were. Does past performance indicate future performance? NO. But does it shed light into what we may see? You betcha.

Look, I’m guilty as well of talking about past events. My Housing Market Updates are full of past items; because stats are verifiable, and we can use them to shed light on what has happened with the economy. Just like an Investment Statement you receive from a Brokerage shows what your account DID, it does NOT show what it’s going to do next month (let alone the next day). But we still report on this, all the time. So, I won’t stop doing what I do; many people that are ‘casual observers’ of real estate still need a market synopsis, a snapshot, even if it’s in the past. That way, when I throw charts up of Past Sales Values, people do appreciate the value behind them.

Even so, when you are charting what has happened, you can make a chart look good, or bad. You can make it scary or encouraging. It’s all how you frame an item. For instance, take a look at the following two charts:

If you look at the chart on the left… you see a bit of panic, right? Some nice climbs up, but some steep drops down? Then you look at the chart on the right. There was a period of a slight downtrend, following by a long ride up, with very small blips here and there.

The two charts are tracking the same thing; the Median Price of Single Family homes in Las Vegas. The exact same thing. The difference… the chart on the left is the last 12 months, and the chart on the right has 10+ years of data on it. Crazy, right? Same data. Same everything… just a different period of time it’s looking at. Want to see a real roller coaster? Check this one out:

Once again… same statistic measured; Median Sales Price, just over a 14 year period of time. If you bought at the peak, you rode it down, but are back to where you are. But, really, you’re not back to where you are. If you weathered the storm, you’re actually much further ahead because if you’re like most buyers, you have a mortgage, and now your mortgage is close to half paid off if you didn’t refinance! But we’ll talk about that on another blog!

So when you see a chart, make sure it’s telling you the whole story, or at least all the story YOU want to hear. Because all three visuals above show very different stories, but all three rely on the same data; just a different timeframe of it.

Looking at the data, you can easily point to the bottom of the long term chart and say “I would’ve loved” to buy in 2012. Yeah? You didn’t, so what? Look at the 2nd chart again. The same thing could be said by people “Man, I wish I bought in 2017”. But if you didn’t, it’s okay. There is always going to be a low point where people feel like they ‘missed’ an opportunity. The missed opportunity is paying down someone else’s mortgage because you were afraid to overpay on a home.

This is why so many people rent for years, and years and years. They are terrified to ‘overspend’ on a home. What is overspending? Do you think people that bought in 2006, but bought for the RIGHT reasons, and decided to stay in the home feel they bought at the wrong time? No, because they now owe half of what they did, and in about 15 years, they’re home is FREE AND CLEAR.

If you pull a chart out long enough, there will always be lower lows.

What we can do, is focus on what we are seeing now, and determine how we THINK that will effect things in the future. And we can decide if we want our home to be a home, a place to build wealth over time, or an ATM. If you’re planning on using it as an ATM… that’s what caused the 2008-2012 crisis. If you’re looking to build wealth, and are in it for the long term, the answer is always “NOW” is the right time to buy. Don’t let a chart worry you.

-GZ