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Yeah, but.
National chart.
Regional housing market.
Needs prior year’s data as well, like more data, corrected to # inspectors.
Sorry, all is see is two wavy lines. Could someone explain what each color means please?
Also, there are a number of horizontal grey lines, but the chart doesn’t tell me if they represent homes, hundreds of homes, thousands of homes, dollars or gallons of gasoline.
Following up on @ Bryce Nesbitt’s comment about prior years, it would be helpful if it were charted on the same chart in a different color, which would allow us to see at a glance if the numbers are higher or lower than last year and, more importantly, following the same trend.
Nice beginning effort, it just needs a little polishing!
2 Likes
the chart doesn’t tell me if they represent homes, hundreds of homes, thousands of homes, dollars or gallons of gasoline.
No, they don’t represent homes, they represent recent sales contracts on homes that haven’t yet closed. It’s the earliest data that anyone could possibly gather about pending home sales. Bottom of InterNACHI® Pending Home Sales Indicator
Thanks for producing something close to real time data. It’s a struggle to keep a current pulse on the market conditions.
Correcting to # inspectors is tricky.
It can’t just be that, as inactive inspectors would pile up over time.
Maybe it would correct to inspectors with at least 2 contracts in the last six months.
And… regional?
You could be averaging a hot and cold market.
And what’s purple vs. green (completed or not)?
Correcting to # inspectors is tricky.
It can’t just be that, as inactive inspectors would pile up over time.
It’s correcting for average number of inspections for each of thousands of inspectors who use our online agreement system. Then those averages are averaged using a geometric mean and compared to every other day. So if if most of our inspectors are selling more inspections than normal, the data points that create the line go up respectively. And vice versa. If most of our inspectors are selling less inspections than normal, the data points that create the line go down respectively. It has been an accurate predictor month after month and way ahead of other pending home sales indicators because InterNACHI and only InterNACHI knows when a home goes under contract. Everyone else only knows when a home is sold (closes), which occurs about 45 days later.
It’s a secret … shh
The green line represents homes that just went under contract (homes sold, but not yet closed). The purple line represents inspection agreements executed (inspections sold, but not yet performed). They should always remain fairly parallel to each other as a cross check that our indicator is working. And so far, they have been.
The other reason for plotting both is to monitor the gap between them. There is some correlation between the size of the gap and the strength of a seller’s market. If all of a sudden the gap would dramatically increase, we’d know that there is some macro problem in the economy or in our industry that may require InterNACHI to act.
We have several brokers at Goldman Sachs who trade off our pending home sales indicator and who start calling me if I don’t release it on the first of every month.
What if an inspector completes no contracts. Are they inactive/on disability, or just not getting calls?
We don’t know. But that wouldn’t affect the indicator. A normally busy inspector could go nuts, fall in love with a young lady, and run away to a deserted island and the number of total contracts wouldn’t change. His inspection work goes somewhere.