I just responded to a survey of real estate agents that I get on a regular basis. While I don’t want to name names, the survey comes from a group inside the real estate industry. The survey covers a lot of things like sales activity, inventory, types of sales, experiences during the sales, and forward-looking opinions. I got to the question below and was quite upset:
In your area, what are your expectations for home prices over the next year?
Home prices will rise 0-5%
Home prices will rise 5-10%
Home prices will rise 10-20%
Home prices will rise more than 20%
Home prices will fall over that time period
This is a very biased question. It is clear from the possible answers that the intent is to skew responses to the “home prices will rise” category. Fully 4 out of 5 (80%) of the possible answers are for rising prices. Anyone whose ever taken a basic statistics class will realize that the answers to this question will be unfairly go heavily towards the positive side.
If I could make my own answer to this question, I would say prices will remain flat. I believe many of my peers would do the same. Back in the 2000-2004 era the options given above may have been less biased, given that the market trends were all pointing to the upside, but when we’ve had multiple years of declining prices and only recently seen some stabilization, these options heavily influence the response and do a huge disservice to the accuracy and quality of the survey.