This week the National Association of Realtors announced that the data they’ve been releasing on home sales has been flawed – mainly understated – by possibly as much as 20% lower than previously reported. They said they will recalculate the data going back to 2007. The national news/business TV shows have reported on this because it will mean the housing decline will be much worse than earlier thought. So be prepared when you hear more about it.
NAR indicated a problem with areas where an agent might belong to two MLS’s and posts their listing in both MLS’s. Denver and Colorado Springs were mentioned, but there are high population areas – East Coast – where an agent needs to belong to more than one MLS in order to capture all potential buyers. When that ONE house sells, its sale is recorded in both systems so the sale is overstated.
The NAR also said there may be a problem with new-builds being double counted since they sometimes are listed in the MLS but the builder reports the sale as well. We have that issue here, since builder spec homes are often placed in the MLS. Even if the builder hasn’t put the home in the MLS, the agent who sells the home can enter it in after the sale in order to record a sale for that agent. Again, this would result in double counting for any report that has obtained data from the builders as well as the MLS.
Our own local Board (CBR) often issues reports by zip code. I’ve previously written why that is not a good move because many of our zip codes cross school district lines. Home buyers tend to want to buy homes according to the schools. To illustrate how the data can vary, let’s consider Powell’s zip code – 43065 – which primarily is southwest Delaware County, but it also extends down into Franklin County in the Smokey Row/Hard Rd area. There is a wide difference in the homes and prices in the entire zip code.
For Jan-Nov 2011, in the entire zip code of 43065 (excluding short sales, REO’s, foreclosures, condos), there were 377 homes sold at an average price of $347,114. But if we view it by the four school districts found within the 43065 zip, here’s how the numbers shake out:
- Olentangy SD: 265 homes at average sale price of $394,425.
- New Builds in Olentangy SD: 8 homes at average price of $438,264.
- Buckeye Valley SD: 43 homes at average price of $291,400. (mainly an area around & part of Scioto Reserve)
- Dublin SD: 24 homes at average price of $285,285. (primarily Shawnee Hills and Summit View Woods in Franklin County)
- Worthington SD: 45 homes at average price of $154,717. (Franklin County around Smokey Row/Hard Rd)
This is why I don’t use the NAR or CBR data for any of my reports on this blog. There are just too many misleading nuances. Real estate is local and if one doesn’t know about or understand the specific points of a given area, the public can really be misled.
