Tuesday, March 18, 2014

Dirty Data [Visualize This]

by Osman Parvez

This post is mostly for the Realtors in the audience but it should also concern those who track real estate markets in Boulder and beyond. 

Back in January, I wrote an open letter to BARA concerning an data error in their statistical analysis.   The chart below is a visualization of a problem with dirty data. 

  
IRES and Metrolist (METRO) provide MLS services for our region.   Throughout Boulder County, IRES dominates the market (blue).  In some locations, Broomfield most notably, Metrolist has a significant market share (grey). 

The data provided by the Boulder Realtor Association, some of which I use as a foundation for my analyses on this blog, does not contain Metrolist data.   Although IRES allows subscribers to view Metrolist listings, it's not possible to download Metrolist data through the IRES interface.   

Sometimes agents will enter information into both MLS systems, creating a duplicate but at least one listing will show up in the data export.   The potential error shown above (red circle) is thus conservative.   The real error is likely slightly lower.  

In Boulder and Longmont, the error is so low that it's essentially a non-issue. In Broomfield and Erie, not so much.   Always check the data source when you see an analysis.  I try to put the source on every one of my charts. 

When does this matter?
- If you're a home buyer using an IDX listing alert system (virtually every agent's website) that only draws from one MLS.  You're potentially missing listings.    If you're a serious buyer, make sure you get listing alerts from the MLS itself, not a third party website. 

- If you're analyzing comps to determine the value of your home or a property you're considering buying.   Double check that you have the full data set and be sure to pull comps from the tax assessor for unlisted transactions.

- If you're tracking market trends in general, particularly in Broomfield and Erie.   Sales volume and inventory will be off.    Don't trust statistics from these markets unless you personally aggregate and clean the data.   

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