The Plural of Housing Anecdotal Is Not Data, But It Can Be a Leading Indicator
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By Jonathan Miller
Special Contributor
- Housing metrics trade-off: Pending sales are faster but less reliable; closed sales are slower but confirmed.
- Half-step metric: “New signed contracts” (past 30 days) give the most current market view.
- Anecdotal insight: Pre-qualified local feedback, like the Fed’s Beige Book, signals shifts before official data.
Understanding Housing Market Trends ASAP
Admittedly, going into the Beige Book and anecdotal is a little wonky, but I promise it is worth it. Here it goes…
Everyone who interacts with the housing market has all heard this debate between pending and closed sales:
- Pending Sales (faster but many are not successful) – They occur faster than closed sales, but roughly 15% to 20% never close, so one could argue that they are a “false positive” metric for the market.
- Closed Sales (slower but all are successful) – A closed sale date lags the contract date by roughly 30-60 days (add another 60 days during the early days of the pandemic), but it is a confirmed, successful transaction.
Early on, brokerage firms that tried to undercut the wide coverage my market studies received were accused of being based on closed sales. Many would say that closed sales lagged the market more than contracts. I certainly agree, but many contracts never close, and the actual contract price is not known until the sale closes, so contracts are just about transactions, not prices. Many contracts are not disclosed when they are pocket (whisper) listings, which tend to skew towards the higher end of the market. In other words, the choice between these two data types is between slow and steady and fast but less reliable. Pick your poison.
What Resource Is Faster Than Data That Is Reported?
Anecdotal is faster, but let’s break it down.
When I think of working with real estate agents, I have a rule of thumb based on 3+ decades of experience. The average real estate agent rates their local housing market based on their last three deals. If they are doing well, the market is active, and if they haven’t sold anything in 6 months, the market is terrible. That’s an oversimplification, yet agents are in the transaction business, and the local housing market is described in that context.
Anecdotal information tends to be even more current, but its use needs to be qualified. If an experienced real estate agent is discussing the local market with an economist or market analyst, that information can help show what is happening on the ground right now. This is not the same idea as walking down the street and asking random people about a particular topic. The sources have been pre-qualified.
That ‘Half Step’ Thing
Before I forget, I’ve got a “half step” to insert between pending home sales and anecdotal. That half step involves the word “new.” When pending home sales are calculated, they represent the total number of pending home sales or the number of existing homes under contract at that moment. A more current way to look at pending home sales would be “new signed contracts” which means all listings that went to contract in the past 30 days. If a home went to contract 5 months ago and has not closed yet, using this stat is like relying on a closed sale from 3-4 months ago. It’s dated. For my market reports on signed contracts, I only looked at deals that were signed in the past 30 days to give the reader a better sense of what was happening now.
Why the Fed Cares About Anecdotes
I’ve been a resource for the Fed’s Beige Book for nearly two decades. It’s a spectacular resource for the real estate industry to gain insights into emerging economic trends in housing. For some serious trivia, the Beige Book was named for the color “beige,” renamed in the early 1980s from the “Redbook,” which was less prominent and avoided signaling that it was a primary driver of policy.
- Timeliness: Official data (GDP, CPI, payrolls) are published with lags, often revised, and can miss turning points in real time, while conversations can reveal shifts in demand, hiring, pricing, and credit conditions almost as they happen.
- Early signal of turning points: District contacts sometimes report that conditions are improving or deteriorating months before those shifts appear in hard data, so anecdotes can serve as informal leading signals of recessions, recoveries, or emerging inflation pressures.
- Narrative behind the numbers: Hard data may show “what” is happening, but often not “why”; anecdotal feedback might explain the motives and constraints, which helps policymakers forecast the next moves in those series.
- Granularity and breadth: Through the 12 Reserve Banks’ networks, the Fed hears from small businesses, large firms, nonprofits, and local leaders, giving a textured, regional picture that aggregate national data can smooth over or miss entirely.
- Beige Book as structured anecdote: The Beige Book explicitly synthesizes this qualitative information on current conditions and expectations, and research shows its text can be useful for forecasting and recession assessment, which is exactly the role of a leading indicator.
Final Thoughts
Tracking housing trends means balancing speed with accuracy. Pending sales give early signals but are unreliable, since many fall through, while closed sales confirm prices but lag pendings by 1 to 2 months. Newly signed contracts offer a timelier middle ground. Anecdotal insights from experienced agents can reveal current shifts before data does—similar to how the Fed’s Beige Book uses structured anecdotes to spot emerging housing and economic trends in real time.
I’ll still recite my favorite saying at will: “The plural of anecdotal is not data.” But it does have a use as long as it is “structured.”
The Actual Final Thought – Hate to say it.
Jonathan Miller is a housing analyst and professor at Columbia University. He is a syndicated columnist of “Housing Notes.”
