Ellen Podmolik reported today that the Illinois housing numbers have been inflated...performance was worse than expected....
see article below:

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.

However, on Monday, the Realtors group said the number supplied by Midwest Real Estate Data to the Tribune was too low. Looking at a revision of its own information Monday, the association said the median price of a condo in Chicago in May was $249,900, a 7.8 percent decline from the price of $271,150 it maintains was achieved a year ago. Still it was far off the mark from its original pronouncement.

The Realtors on Tuesday will meet with Midwest Real Estate Data to investigate its reports on the city's housing market since February 2008, when the state group began reporting, at the request of the Chicago Association of Realtors, city-specific data.

"Whatever they're putting out should be correct," said Eric Rojas, a Prudential Rubloff real estate agent in Chicago. "There's no doubt about it. I know that people watch the news and read the papers and they're confused by the data. When we talk to buyers and sellers, they really don't know what's going on."

Still, agents say they themselves pay little attention to the numbers that are issued by real estate trade groups, whether they are local, state or national.

"Median price in the market does not matter at all," said Stacy Karel, an @Properties agent. "It's building or block specific. It's a micromarket. You can't compare east of Western (Avenue) with west of Western." When Rojas has pulled data directly from Midwest Real Estate Data, it shows that even the best city neighborhoods remain depressed.

For instance, the median price of two-bedroom, two-bathroom condos in Chicago's Lakeview neighborhood during the first six months of the year was down 10.5 percent on a year-over-year basis, from $380,000 in the first half of 2010 to $340,000 this year, according to information Rojas pulled from Midwest Real Estate Data.

While the state association's investigation of the problem is just beginning, the group has determined that the problem rests solely with the city-specific numbers and not with any county-level data. At least initially, the group's information technology staff believes the error may involve improper coding of sales data and depending on the findings, the group may have to revise its Chicago-specific data for the past 39 months.

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."

Local multiple listing services like Midwest Real Estate Data are continually updated, and data on listings, sales and prices are fed into it by agents as they do business. Midwest Real Estate Data gathers the month's data, generally five to seven days after the end of a month, and generates data files for U.S. House Stats, which is owned by the national association. State associations like the Illinois group generate reports based on those numbers.

Midwest Real Estate Data doesn't think the problem is on its end.

"MRED uses a regular procedure for sending statistics to the Illinois Association of Realtors," according to an emailed statement from CEO Russ Bergeron. "That procedure has not changed. We are completely confident in the numbers we gave to (the Illinois Association of Realtors) and we're working with them to help them identify how this discrepancy on their end occurred."

Separate from the local discrepancies, questions arose in February about the accuracy of home sales data as reported monthly by the National Association of Realtors, and whether the trade group had been overestimating the volume of existing home sales since 2007.

Possibly as soon as August, the national group will issue revised- and revised downward - national home sales numbers going back at least three years, a spokesman said Monday.