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Tech strategist Mike DelPrete on Thursday implored a conference of real estate professionals to guard themselves against ways that data-based narratives can be used as “propaganda.”
DelPrete took the stage at Inman Connect New York and laid out ways that agents and brokers at the conference could spot exaggerations or the use of carefully selected metrics, which he believes are often employed by real estate companies with intent to mislead.
“I believe if you understand the methods of someone trying to outwit you, you can anticipate their actions and respond effectively,” DelPrete told the group. “My suggestion to you is be curious. Don’t just read the headlines. Dig a little deeper.”
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Companies don’t have to make up data in order to mislead their audience, DelPrete said. Close observers can often spot the real story in the fine print, if they know where to look, he said.
Part of the problem, DelPrete said, lies in how companies selectively highlight financial metrics that look good for them in the moment. They often switch between measures like net profit, adjusted gross profit, or adjusted EBITDA, in service of this goal, he said.
This type of cross-metric gamesmanship has driven DelPrete to compare companies by “net cash provided by operating activities” — a publicly reported metric that strips out much of a company’s investing and financing activities — when he combs through corporate financial filings.
But it’s not just real estate companies that can paint a misleading picture with data, DelPrete argued.
News outlets sometimes report data in a way that might lead readers to the wrong conclusion, he argued. He pointed to several recent headlines — including one in Inman — that referred to a 4.8 percent seasonally adjusted increase in existing-home sales from October to November as a “surge.”
But when DelPrete showed the audience a chart of the raw number of existing-home sales over the same period — before the National Association of Realtors’ seasonal adjustment — they dipped from 348,000 in October to 315,000 in November. Declines are typical for that time of year, leading NAR to sometimes report a seasonally adjusted “increase” when sales fall by less than usual.
“Everything I’ve talked about, all of this data, it’s 100 percent accurate,” DelPrete said earlier in the presentation. “It’s that next level. It’s how that data is displayed.”
In past conversations with Inman, DelPrete has said that he is not a fan of blanket seasonal adjustment, a common practice in the field of housing economics, where transactions tend to rise in the spring and summer and slow in the fall and winter. Instead, he has preferred to present the raw sales numbers in the context of their levels from previous years.
DelPrete went on to point out something he sees as a big missing piece in the discussion of today’s depressed sales environment.
Yes, home sales are down, he said. But thanks to home-price growth and steady commission rates, the total pool of commissions available to real estate businesses in 2024 was actually bigger than it was in 2019, the year before the pandemic began.
DelPrete stressed that it’s essential for real estate professionals to approach presentations of real estate data with a critical eye, asking themselves whether data is being presented in the proper context.
“I think now more than ever, in the world we live in — not just in real estate [but] in everything — it’s really important to get curious and dig deeper, and not just stick with the headlines,” DelPrete said.