Why display 6 years instead of 30?

I continue to be the go-to guy for bad graphs. Today (i.e., 22 Feb), I received an email from Gary Rosin:

I [Rosin] thought you might be interested in this graph showing the decline in median prices of homes since 1997. It exaggerates the proportions by using $150,000 as the floor, rather than zero.

Indeed. Here’s the graph:

A line plot, rather than a bar plot, would be appropriate here. Also, it’s weird that the headline says “10 years” but the graph has only 6 years. Why not give some perspective and show, say, 30 years?

9 thoughts on “Why display 6 years instead of 30?

  1. I’m fundamentally bothered by bar plots that don’t start at 0, completely aside from skewing the proportions. I’d prefer to see this as a (possibly connected) dot plot, given the range.

    • If house prices went to 0, it would be a pretty interesting world!

      … Since it seems like prices should stay positive, seems like the vertical axis should be log scale, but where would you like the horizontal axis to cross?

  2. You can see a longer, much better plot at Wolframalpha; actually it still suffers from bad y-axis limits but (1) not quite as bad, starting at 50K rather than 150K and (2) clearly indicating with a broken axis that the scale does not start at zero. It does not appear to be inflation-adjusted although I’m not sure.

    The CNN Money one is so awful I have to think someone did this on purpose to exaggerate the decline.

  3. If they show 10 years, you’ll start seeing business cycle effects which takes away from the downward trend in the graph (i.e. lying with statistics).

    • Interesting. The housing bubble begins in this graph just about the same time the dot.com bubble collapses. People just gotta speculate, I guess. I recall that that was just about the time that the media started talking about how real estate never goes down, etc.

  4. Caveat, even with a zero base and a longer interval, median house prices can be misleading, at least in smaller areas.

    After all, this really means: median price of *houses sold*, which does not account for changes in distributions, so it doesn’t necessarily imply the result of selling a specific house.

    Around here (Silicon Valley), if one looks at medians / town or zipcode, they often do not move in concert, as low, mid and higher-cost houses sometimes have different dynamics, and towns differ in their mixes. Certain realtors are looking forward to a Facebook IPO :-)

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