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VOL. 126 | NO. 141 | Thursday, July 21, 2011

MAAR Trying to Fix Faulty Sales Data

By Sarah Baker

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The Memphis Area Association of Realtors said a software glitch caused flawed housing reports to be released over the last six months but is working to correct it.

In January, the 101-year-old local residential real estate trade organization made a change to its MAARdata monthly home sales market reports. Instead of tracking Memphis-area home sales based on closing dates like it had done for years, MAAR began tracking home sales based on recorded dates.

With this change in reporting, the monthly numbers became inflated, presenting a rosier than normal view of the local housing market. Those numbers don’t “deflate” until months later when they are then reflected on the year-to-date reports.

From January to June, adding up each month’s MAARdata sales individually yields a year-to-date total of 7,347 home sales. That’s an increase of 588 sales, or 8.7 percent, from the actual year-to-date total of 6,759.

Even taking the updated year-to-date total of 5,327 from the May sales report and adding June’s monthly sales of 1,612 brings the 2011 total to 6,939. That marks an increase of 180, or 2.7 percent, from the actual total.

Don Wade, MAAR information and research director, said the reason for this inflation is due to a glitch with the organization’s software vendor, Redplus Innovations. MAAR has had a relationship with the Memphis-based real estate data and technology company since 2004.

Anytime there was an edit made to a particular computer field, the software was “latching onto” whatever the date was that the edit was made. So if a house was sold in January, but then an appraisal was entered in May, the sale would then leave January’s totals and go to May.

“It was kind of like sales were leaking from one month into another, because if you go back and run the figures now, you get lower totals,” Wade said. “If I run the report for June now that I ran two or three weeks ago, the total is lower now because some of those sales there have been edits made in July and so they jumped to July.”

Redplus is working on rectifying the problem for the next report going forward, Wade said. That entails going back to correct the numbers for 2011 and 2010, because when MAAR started using the recorded date in January, it was rerunning the 2010 numbers using the recorded date to ensure “an apples to apples comparison.”

Once Redplus has done its part and corrected the software problem, Wade will go back in and rerun all of the reports “to get good numbers,” to post on the website.

“It’s one of those things where you had no reason to look for this problem or to suspect it was going on, but then once you find it, you realize ‘Oh, OK, apparently it was there from the time we moved to recorded date,’” Wade said. “It’s very important to us that what we have out there is accurate. That’s important for Realtors, for consumers, for everybody.”

The complete monthly MAARdata report tracks all publicly recorded sales in Shelby, Fayette and Tipton counties, and also includes information on pending sales and active listings. These are different from MAAR’s monthly MLS sales reports, which are generated around the 15th of each month for sales in the previous month.

The idea of switching to the recorded date model, Wade said, was to be able to present the home sales information more promptly than before. Instead of getting the January numbers during the first week of March, the new method would allow MAAR to produce the reports in early February.

“The ironic thing is when we changed from closing to recorded date, one of the things we saw as a real advantage was being able to deliver the same good, solid information in a more timely manner,” Wade said. “And ultimately, I’m still glad we made that change because I think it’s important to be as timely as possible as fast as everything moves today. Obviously, we’re not happy this happened and our software vendor is not happy this happened, but we’re taking care of it.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 85 305 21,577
MORTGAGES 62 223 16,417
FORECLOSURE NOTICES 0 17 1,504
BUILDING PERMITS 0 571 42,491
BANKRUPTCIES 34 138 6,717
BUSINESS LICENSES 40 72 3,169
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0