We have always found www.BestPlaces.net as a terrific resource for market data. It’s accurate, based on government findings, and clearly presented. However, there are some issues with their data that are not their fault but rather the byproduct of macro issues in certain cities. And these potential problems need to be discussed as they often paint an inaccurate picture of certain markets.
Vacant housing percentages
The photo shown is an abandoned house in St. Louis – surrounded by hundreds of city blocks of similar structures. Older cities with blighted neighborhoods that were built in past centuries and are no longer habitable bring down the overall market numbers for vacant housing. The U.S. average is 12.2% for market housing vacancy, yet some cities show numbers significantly higher. But this is not an accurate reflection of the true economy because they are weighted down by large sections of the market that are no longer inhabited yet the houses still stand. This is the case in the St. Louis metro. You have thriving sections of the metro but they are averaged with blighted areas that are ghost towns.
Average home cost amount
This same issue impacts the average home cost for these metro areas. If you have a $150,000 home and you combine it with a home valued at $5,000 (like the one shown above), it takes you to an average home cost of $77,500. And that’s simply not fair, when another market that does not have a blighted section has $150,000 homes and nothing to drastically bring down the average. This issue artificially punishes all older cities who have long-forgotten ghost towns within their boundaries.
Ditto for crime statistics. If you have one section of town with the highest levels of crime (a 10 on the BestPlaces scale) and then average in the entire remainder of the community with perfect crime scores of 0, then the average would still be a 5. And, once again, that’s not a fair assessment. If you went strictly by the stats you would garner perhaps the wrong impression of these markets and miss out on good mobile home parks to buy.
Another fooler: areas with a seasonal component
Some parts of America are blessed with strong seasonal tourism demand and activities, and this turns into a curse when Bestplaces.net calculates its vacant housing statistics. Although people own their homes year round, the fact that they use them only part of the year throws the stats into pandemonium. Take, for example, Saugatuck, Michigan, which is a highly desirable summer community for Chicago residents. The median home price is over $330,000, yet it’s showing the vacant housing rate at 50% vs. the U.S. average of 12.2%. How is this possible? Because the way Bestplaces sets the algorithm it punishes those communities that are seasonal – despite the fact that the homes are owned and paid for the entire year and the simple fact that people needing affordable housing (running the restaurants, hotels and stores) are there full-time.
How to correct these issues
When you see stats on a market that seem unusual to you, it’s OK to go farther with your exploration. Here are some methods to do that. One is to simply call the local Chamber of Commerce and inquire as to why the number is larger or smaller than the national average. Another is to look at Zillow.com and see if there is a congregation of extremely low home values inside the metro area. And, in the case of communities with a seasonal component, learn more about their economy. And, most importantly, let your test ad be your guide to true consumer demand.
There are many great facts to be found on www.BestPlaces.net – it’s one of our favorite websites for data gathering. But all stat surfers need to be aware that there are certain conditions in which the numbers may be skewed unfairly or inappropriately. Be careful not to miss our on opportunities as a result of these aberrations.