Mission Control, We Have A Problem [Analyze This]

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by Osman Parvez
     How can you make an intelligent real estate decision if you don't know what's happening in the market?   As a Realtor, how can you provide accurate advice on market conditions if your underlying data is flawed?

I believe the best way to help my buyers and sellers is by providing an accurate and thorough analysis.   Without it, they're making decisions blindly.   Some of that research appears here on this blog, much more detailed research goes into the Silver Fern Report.  

     It's come to my attention that there's a problem with missing data used by Realtors in certain local markets.  This problem affects anyone who relies on IRES or the Boulder Area Realtor Association (BARA) for their data.    In the interests of transparency, better communication, and better service in the Realtor community, it's time to start talking about the problem.

Visualizing The Problem

     The missing data problem is a little difficult to explain.   Let's start by looking at the scale of the problem and the locations impacted (scope).    Here are the charts.


The chart above shows the difference between IRES and Metrolist data sources.  These are the markets covered by the BARA monthly statistics, the data source for many Realtors and for the Silver Fern Report.  By adding up this year's sales volume (through the end of October), the scale and scope of the problem are illustrated.    Some of these markets are missing ridiculously large amounts of data.

As of this writing, IRES doesn't allow users to download Metrolist data.   This results in erroneous information being reported on market conditions by BARA because a significant portion of the data is missing from the sample.    It means that the Silver Fern Report also contains erroneous data in certain markets.

The missing data problem is massive in the certain areas.  Let's remove the worst offenders from the chart and take a closer look.


Removing Suburban Plains, Suburban Mountains, and Broomfield from the chart allows a more intelligent scale.      Clearly, the problem is not insignificant in Erie and Lafayette either.     It's less severe in Boulder, Louisville, Longmont, Superior, and Boulder AD.

Even in the less impacted markets, somewhere between 4% to 10% of the data is missing.    If the small percentage of Metrolist sales data in the data set stays consistent, it's not that bad.    In other words, it still sucks - but it sucks less.

Let's Fix The Problem

In addition to an obsession with good research, I also believe in a process of constant improvement.    As a solution (temporary, I hope), I'm going to remove the most offending markets from future Silver Fern Report.

I've illustrated the problem for you.  I've also already brought it to the attention of the powers that be.  The solution is that  IRES should enable downloading Metrolist data.   If data sharing agreements between the MLS systems do not currently allow it, change the agreements.    Data should be free, especially on such an important sector of our local economy.    Heck, I even make my analysis freely available because I think it's vital that market participants know what's really happening.    That analysis doesn't just happen, I roll up my sleeves and spend hours and hours putting it together.    I still want it out there, widely distributed (sign up here).

It appears that IRES has implemented some options to get around the data sharing problem.  I'll explore these and see if I can rebuild the reports, but for now - Erie, Lafayette, Suburban Plains, Suburban Mountains, and Broomfield will no longer get coverage in the Silver Fern Report until the underlying data source (BARA or IRES) are corrected.     Realtors or other market participants who rely on these data sources should do so cautiously.     Old versions of the Silver Fern Report or other analyses provided by Realtors in these market areas should be viewed with suspicion.     If nothing else, ask your Realtor about the quality of their data source.   You'll notice the source of my data is at the bottom of nearly every single chart I put together.

Now, you know.

NOTE:  The impact of the missing data problem is more to non-clients and anonymous readers of my research because it's a 10,000 foot level problem.    When you're working with me directly as your Realtor, we're in regular communication about market conditions specific to your real estate problem.

---Note: Our goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Silver Fern Homes recommends careful and complete due diligence before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.