What do Government housing statistics and Zillow estimates have in common?
This week the Department of Commerce released its figures for new construction residential sales in June. Correction, make that its estimate of sales of new construction in June.
The headline news was that sales were up 8.3% to an annual rate (seasonally adjusted) of 497,000. Pretty good.
There is, however, a caveat: the 8.3% number is plus or minus 20.5%. In case we don’t know what that means there is a footnote to explain that, because these numbers are obtained from samples which may have errors, the range is actually from down 12.2% to up 28.8% above the May 2013 number. And the 38.1% increase above the June 2012 number was plus or minus 22.0%, meaning a range from up 16.1% to up 60.1%.
So the conclusion is that new construction sales are up: plus or minus, and seasonally adjusted, of course.
The similarity with Zillow estimates? A house currently for sale in Marblehead carries a Zillow estimate of $4.2 million with a range of $2.5 million to $7.3 million, or minus 40% to plus 74%.Or as the Government would say, from minus 40.5% to plus 73.8%.
I love the precision of Government estimates, I mean statistics.