From where does the data come?
The Indiana Association of REALTORS® is collecting data directly from the state’s 21 largest Multiple Listing Services (MLS) and the Broker Listing Cooperative® (BLC®) in central Indiana. These 21 represent nearly 97% of the housing market statewide:
- Bedford Board of REALTORS®
- Bloomington Board of REALTORS®
- Columbus Board of REALTORS®
- Elkhart County Board of REALTORS®
- Evansville Area Association of REALTORS®
- Frankfort Board of REALTORS®
- Fort Wayne Area Association of REALTORS®
- Greater Northwest Indiana Association of REALTORS®
- Jackson County Board of REALTORS®
- Kosciusko Board of REALTORS®
- Lafayette Regional Association of REALTORS®
- Metropolitan Indianapolis Board of REALTORS®
- Mid-Eastern Indiana Association of REALTORS®
- North Central Indiana Association of REALTORS®
- Northeastern Indiana Association of REALTORS®
- REALTORS® Association of Central Indiana
- Greater South Bend/Mishawaka Association of REALTORS®
- Southeastern Indiana Board of REALTORS®
- Southern Indiana REALTORS® Association
- Terre Haute Area Association of REALTORS®
- White County Association of REALTORS®
IAR continues to work with the remaining MLS and local REALTOR® Boards/Associations to obtain data for inclusion in these monthly reports. As those data are obtained, additional counties will be added to the report.
How do we obtain the data?
Our database receives information about properties listed and sold through the above-mentioned MLS and BLC® (21 of 27) by way of an automated and nightly data transfer. The data include geographic, property type, property characteristic, and some tax information.
What are Multiple Listing Services (MLS)?
REALTORS® have spent millions of dollars to develop Multiple Listing Services (MLS) and other real estate technologies that make the transaction more efficient. An MLS is a private offer of cooperation and compensation by listing brokers to other real estate brokers.
In the late 1800s, real estate brokers regularly gathered at the offices of their local associations to share information about properties they were trying to sell. They agreed to compensate other brokers who helped sell those properties, and the first MLS was born, based on a fundamental principal that's unique to organized real estate: Help me sell my inventory and I'll help you sell yours.
Today, through more than 800 MLSs, brokers share information on properties they have listed and invite other brokers to cooperate in their sale in exchange for compensation if they produce the buyer. Sellers benefit by increased exposure to their property. Buyers benefit because they can obtain information about all MLS-listed properties while working with only one broker.
The real estate market is competitive, and the business is unique in that competitors must also cooperate with each other to ensure a successful transaction. MLS systems facilitate that cooperation.
The MLS is a tool to help listing brokers find cooperative brokers working with buyers to help sell their clients' homes. Without the collaborative incentive of the existing MLS, brokers would create their own separate systems of cooperation, fragmenting rather than consolidating property information.
MLSs are a powerful force for competition. They level the playing field so that the smallest brokerage in town can compete with the biggest multi-state firm. Buyers and sellers can work with the professional of their choice, confident that they have access to the largest pool of properties for sale in the marketplace.
Real estate information on the Internet is readily available. Consumers can access and view all publicly available listing information on the Web site of their broker of choice.
MLSs are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property. In most cases, access to information from MLS listings is provided to the public free-of-charge by participating brokers. Data that is not publicly accessible includes information that would endanger sellers' privacy or safety, such as seller contact information and times the home is vacant for showings.
What data do we use?
Because all real estate markets are local, so are MLS systems and needs. The industry is, this June, adopting a national Real Estate Transaction Standard, or RETS. This standard has been adopted by all of the MLSs from which we are obtaining data. However, local market differences find their way into these RETS-compliant systems.
Therefore, our data warehouse uses a screening process to ensure data quality (for example, we reject any sold listing without a sales price). In addition, we electronically “map” the data into a structure that translates differences in MLS practices such that summary and comparative statistics can be produced. An example of a difference would be that one MLS would include a modular built home in summary statistics of single family residential homes. Another MLS would not; the second MLS would consider that same modular built home to be in the same category as mobile homes. To be clear, these differences are not significant, but our process of producing consistent statistics and analysis mean that there are often marginal differences in summary statistics between what a local MLS produces and what we report. Neither are wrong, both are useful and reliable.
Existing Home Sales - Units Sold:
For a specific time period, units sold will include those MLS listings for which a sale closed during that time period, as reported by the MLS. Units sold will be categorized by geography. A sale of a property located in a county will be reported as occurring in that county, not in the geography included in the MLS in which the property was listed. For example, a sold property located in Morgan County that is listed in the Bloomington Board of REALTORS® (BBOR) MLS will be reported as sold in Morgan County, not sold by the BBOR. This is true regardless of the membership of either the buyer’s agent or the seller’s agent.
Existing Home Sales - Median Sales Price:
For a specific time period, the median sales price will be the median, defined as the sales price of the property which had exactly the same number of sales with higher prices as with lower prices.
Current Months of Inventory as Measured by Homes for Sale:
The basic calculation to determine inventory divides the number of homes for sale at a point in time by the average number of sales in a corresponding time period. Because the number of active homes for sale and the number of homes sold varies during the year, any measure of supply of homes for sale must incorporate the seasonality of the real estate market. To do so, our measure of months of inventory of homes for sale selects the number of homes for sale from a midweek day in the middle of the month. We do so to eliminate as much of the impact of weekends and end of month activity as possible. For the denominator, we calculate the average number of homes sold during the months over the past 4 years.
How to interpret the data?
All real estate markets are local. One would not watch an Evansville, IN television station’s weather report to learn what the weather will be in South Bend, IN. Likewise, one should not rely upon statistics in Tippecanoe County to determine the state of the real estate market in Decatur County.
IAR reports statewide and county specific statistics in order to provide REALTORS®, home buyers, home sellers, and the public with the best information available. IAR statistics can and should be used to compare Indiana and markets within Indiana with other markets outside of Indiana. For example, while the entire housing industry has experienced unusually volatile period over the past several years, that volatility has manifested itself very differently in different parts of the United States. Indiana has not seen the enormous increases followed by the precipitous and damaging declines in sales and prices seen in California, Arizona, Florida, and other places. While Indiana has not been immune from the problems in the housing markets, the experience here has been different. Home values did not increase to stratospheric levels, nor did they collapse.
Warranty of Data and Statistics:
IAR does not warrant the data to be correct. It is compilation of data contained within those MLSs with whom IAR has an agreement for access to the data. Administrative and processing differences across MLSs do not allow for complete data at any point in time and IAR has no control over the quality of data entry in the individual MLSs. In addition, because IAR assigns a geographical point to each sale based on the property listing’s location, there may be (and often will be) very small differences between what IAR reports and what the individual MLS will report.
IAR’s statistics are estimates based on the existing available data. The data is nearly complete, so that in statistical terms the estimates are based on samples that are nearly identical to the population.