I have a very disturbing email that came in this evening.
It alleges out-and-out fraudulent reporting of home sales in one of the regional MLS systems.
That is, prices paid that are in fact much lower than the "sold" prices reported in the MLS.
The person in question claims to have seen over 100 of these in his area. I have copies of two, and it appears, from the evidence that I have, that at least for those two the claim is accurate.
One in particular I was able to pull the auction data on. It "sold" under reserve, is listed as sold in the MLS at ~25% higher than the "sold" bid, and the premium is disclosed as 5%. This property also has a 90-day "anti-flip" provision on it, implying that the paper may be held by one of the GSEs. (It's a nice-looking place, incidentally.)
Here's the problem, obviously - Case-Schiller and other "home statistics" numbers related to price paid are all computed off these numbers provided by the local Realty boards (via NAR.) If the data in the MLS is bogus then so is the so-called "median sales price" and so are Case-Schiller's numbers!
These are not small discrepancies either - in both cases the "over-reporting" is by approximately 25%!
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