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Why Housing Starts Data Is So Inaccurate

Posted February 17, 2011

    The nationwide U.S. housing starts data reported by major news organizations is not technically "inaccurate", it's just very misleading.

    A "Housing Start," says Dick Plumb, a popular Sarasota real estate agent, "is defined as a home (or housing unit) on which construction started during the month.+

    If you recently saw the news reports on January, 2011 Housing Starts, you would think they went up by over 14% and were at the highest level in 4 years. But actually, annualized nationwide single-family home housing starts, the number most of us are interested in, actually fell by 1% in January to 413,000 units, the lowest level in almost 2 years.

    Ths confusing situation is caused by the fact that, while the Census Bureau reports Housing Starts by "property type," newspaper headlines typically lump all three Census Bureau categories into a single value.

    Here's how the categories actually were reported for January, 2011 by the Census Bureau:

• Single-Family Homes were down 4,000 units, or -1%
• 2-4 Unit Homes saw a negligible change
• 5 or more Unit Apartment Building Starts were up by 46,000 units, or +80%

    Combined together, thses data points do, in fact, represent the reported 14% increase. But, the "surge" in nationwide housing starts reported by most news organizations occurred only in one category, the 5-unit-and-up apartment building category. Single-family housing starts were actually down by 1%, not up at all.

    Like many things in the real estate business here in Florida and elsewere, you need to work with a professional. "Introduce yourself to a reputable mortgage broker and a licensed Realtor and trust the information they provide. Don't just read the headlines and react," says Cheryl Stimac, a prominent Tampa FL real estate agent,

    This would be a great time for you to contact a local Realtor here in Sarasota like Sarasota Realtor, Andree Huffine and get started finding that perfect seasonal, or full-time home you've been dreaming of for so long.