Bad Chicago Real Estate Data From Tribune And Zip Realty

A report published by the Chicago Tribune on Sunday based upon data provide by Zip Realty is totally bogus. In the report titled Near South Side homes selling, on average, for more than list price the Tribune states that “sales in the Near South Side have averaged 106.4 percent of their asking prices, amounting to $579,630.”

But we know this can’t be true because the home inventory situation in the Near South Side is abysmal. So I went into the MLS to check out the underlying data myself. While the basic statement is technically correct, the data doesn’t at all mean what you think it does. In fact, the data is full of garbage and you know what they say about data: garbage in, garbage out. You see the problem is that the home sales data in Chicago’s Near South Side for this time period includes lots of Museum Park’s new development sales – in particular, sales at 1211 S. Prairie. When you look at the details of those transactions in the MLS you see examples like unit 5002 which closed October 29 at $962,970 while it was listed at $850,500. I think we can all agree that whoever bought this unit probably did not beg the developer to let them pay more than the list price. What really happened is that the final selling price includes lots of upgrades and a parking space that costs an extra $35,000. So a preponderance of these listings is skewing the data.

This is a great example of what happens when you have a computer churn through massive quantities of data without any human review. You get mathematically correct numbers that don’t really mean anything.

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