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A change in measuring active real estate listings

Comparing data methodologies in ALFRED

The FRED Blog occasionally refers to ALFRED, the archive of historical versions (or “vintages”) of FRED data that recently turned 15. It has been featured in posts about recurring revisions of employment data. Today we call upon ALFRED to illustrate a different type of data revision: one where the methodology for calculating the data changes.

Here’s an analogy: Imagine preparing a pitcher of fresh lemonade. The recipe that you follow is the methodology; the lemons are the information available to you at the time you mix all the ingredients; and the delicious lemonade is the final product of your work, the data.

Some data, such as gross domestic product and nonfarm employment, are revised up to three times because it takes time and effort to assemble economic information and not all of it is immediately available. These lemons have uneven sizes and yield different amounts of juice.

The ALFRED graph above, though, shows a change in data methodology. The organization reporting the number of active real estate listings, Realtor.com, has changed its process to account for real estate listings. The recipe has changed: The dashed blue line shows the data calculated with the old methodology, and the solid red line shows the data calculated with the new methodology.

Revising the procedure used to report this metric of the housing inventory resulted in decreases of up to 5.7% in the count of single-family and condo/townhome homes listed for sale. To learn more about the data themselves, read the notes below every FRED or ALFRED graph. Those notes are updated when the methodology used by the source changes.

How this graph was created: Search ALFRED for “Housing Inventory: Active Listing Count in the United States.” By default, ALFRED shows a graph with two sets of bars: the most recent vintage and the prior vintage. To change the graph type and style of the series use the “Format” panel.

Suggested by Diego Mendez-Carbajo.

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