The median sale price of listed Chicago mansions (houses with at least 8,000 SF) was only $155,000 in the 3rd quarter, down 96% from 3rd quarter 2011 when the median sale price was $3.85M! I looked at the data to see how this could possibly be.
There were 6 sales of detached Chicago homes reporting 8,000 SF or more. However, when I looked at the listings I found that the approximate square footage (ASF) for most of the homes was over-reported. I suspect that the ASF for these listings was either a typo or the sellers’ agents incorrectly thought the ASF field was for lot size. In addition, 2 of the 6 sales that looked like genuine mansions were foreclosure sales.
Thus, the market for Chicago mansions has not collapsed! There was just a lot of bad data for this segment of the market in the 3rd quarter. That’s why you should question the results of any automated real estate valuation systems. Computer programs don’t have the ability to recognize bad data like I did in this situation.
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