CONDO PRICES IN LINCOLN PARK & LAKEVIEW

It is amazing the amount of websites that like to provide statistics to buyers and sellers regarding pricing. If you go to Trulia, Zillow or even brokerage websites you’ll find different numbers at each one. Even the MLS that I utilize on a day to day basis is able to offer me statistics on price trends in different neighborhoods. However, would you like to know a secret? They’re almost all WRONG!

I was dismayed by the amount of inaccuracies on the web mainly because these figures are fairly easy to calculate. They are not incorrect because people want to push their own agenda, they are incorrect because those putting together the data are flat out stupid! Let me explain the largest error you will find – nothing is adjusted! What people are doing is grouping all sales together and figuring out the average price. While this may provide them a figure quickly it is inaccurate because the types of units sold are not being taken into account. If you don’t understand yet, read the next paragraph. If you do, skip it and move on to the following one.

Lets pretend that you own a small store and you sell two products Shirts and Pants. The shirts you sell are priced at $50 each and the pants are priced at $100 each. If on Monday you sell 10 shirts and 10 pants then you would have total sales of $1500. Now if on Tuesday you sell 20 pairs of pants and no shirts, your total sales would be $2,000. While your total sales dollars may have increased, did the price of your product increase? The answer is no you just sold more of a more expensive product, the pants, as opposed to Monday where you sold less. When we evaluate prices in real estate we must be conscience of this same problem.

When I ran numbers for price changes in condos I looked at each bedroom class separate. I worked the numbers on Studios, 1 Bedrooms, 2 Bedrooms and so on. We then compared this data in the same fashion to the previous year. This is the only way to truly understand what is going on with the market. Because in 2011 we may have sold more 3 Bedrooms than 2 Bedrooms and this could increase the overall average price. Some say we could use Median price to help correct this error, but even then our data is flawed and inaccurate. So lets get to the numbers shall we?

Lincoln Park – Condo Sales from January 1st to October 15th Year Over Year Data:

IN 2011 WE SAW THE FOLLOWING:

STUDIO PRICES: DOWN 18.20% TO AN AVERAGE PRICE OF $107,262

1 BEDROOM PRICES: DOWN 12.04% TO AN AVERAGE PRICE OF $188,178

2 BEDROOM PRICES: DOWN 7.16% TO AN AVERAGE PRICE OF $365,728

3 BEDROOM PRICES: DOWN 5.56% TO AN AVERAGE PRICE OF $570,605

4 BEDROOM PRICES: DOWN 4.48% TO AN AVERAGE PRICE OF $763,163

TOTAL ADJUSTED CHANGE FOR THE AREA: PRICES DOWN 7.72%

 

HOW ABOUT LAKEVIEW? AGAIN SAME DATES APPLY TO THE DATA:

STUDIO PRICES: DOWN 23.51% TO AN AVERAGE PRICE OF $82,176

1 BEDROOM PRICES: DOWN 20.08% TO AN AVERAGE PRICE OF $157,362

2 BEDROOM PRICES: DOWN 8.13% TO AN AVERAGE PRICE OF $311,109

3 BEDROOM PRICES: UP 0.42% TO AN AVERAGE PRICE OF $479,718

4 BEDROOM PRICES: DOWN 10.28% TO AN AVERAGE PRICE OF $604,487

TOTAL ADJUSTED CHANGE FOR LAKEVIEW: PRICES DOWN 8.22%

 

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