From the Chicago Tribune:
The Illinois Association of Realtors said Monday that the median price it reported for home sales within the city of Chicago was inflated in May and mistakes in its reports may go back more than three years.
Errors in the reports can wrongly inflate consumer confidence in a housing market that has been struggling to recover for the past 4 1/2 years. It also can undermine the credibility of the real estate organizations that compile and disseminate the statistics. The Tribune and other media outlets report that data as part of regular coverage of the housing industry because it provides a pulse of the market.
The state Realtors’ group acknowledged the errors after the Tribune, acting on a tip, questioned the accuracy of the May report. The group believes median prices for both condos and detached single-family homes sold within the city contain errors.
“It’s not just May,” said Mary Schaefer, a spokeswoman for the Illinois Association of Realtorsadding that the mistakes appear to go back at least through January. “We’re trying to figure out where the bug occurred. We should have caught it. We pride ourselves on having accurate data. We want to make sure there is 100 percent clean data.”
The size of the Realtors’ errors is statistically significant, at least based on the May median price for condo sales wtihin the city. In its official report that has now been discredited, the trade group previously said that the median price of an existing condo sold in Chicago in May was $299,000, compared with $271,150 recorded in May 2010. In fact, the median price was $243,000, compared to a year-ago price of $265,000, according to data from Midwest Real Estate Data LLC, the multiple listing service for the Chicago area.
The Chicago Association of Realtors “will continue to work diligently with the Illinois Association of Realtors and Midwest Real Estate Data to discover where the reporting error has occurred and improve the process by which we collectively report the data on the Chicago marketplace moving forward,” a spokeswoman said in an emailed statement. “Ensuring the housing data reported on the Chicago market is accurate remains our top priority as we are committed to helping consumers understand the Chicago real estate marketplace with the most exact information possible.”
Schaefer said the group does not think any fraud is being committed. “There’s no playing with the numbers, this is technical,” she said. “It’s how the system is reading the data.”