Highland Park Property Value Rising Under Rotering: Letter

The following was written and submitted by Paul Wehner

Dear Editor:

Last week, Aaron Wolff presented an analysis related to the March 2016 District 112 Referendum that can be summarized by his statement “there can be no doubt that the School Board proposals during these relevant time periods had a serious adverse effect on property values”. In fact, a similar analysis using a superior dataset suggests that there is quite a bit of doubt.

Mr. Wolff used data from the Chicago Tribune to claim that Highland Park real estate prices lagged the rest of the North Shore during the period directly preceding the Referendum vote in March 2016. He then claimed that he predicted this negative impact on home prices and placed the blame for this squarely on the shoulders of the School Board and supporters of the Referendum.

The problem with the Tribune’s home price data is that it compares the raw closing prices for houses sold in one period with those the year preceding. No adjustments are made for size of house, number of bedrooms, or size of lot. Therefore the changes in this measure often are more a function of mix of houses sold during those periods versus the actual underlying trends in the housing market.

Zillow is a real estate website that provides publicly available data that does adjust for square footage, number of rooms and other property characteristics. No data source is perfect but, because it accounts for the mix of homes sold, I would argue that Zillow is a much better gauge of local housing prices.

The Zillow dataset also is superior to the Tribune data because it is much more timely. The most recent Tribune data was from January 2016 which was 2 months before the Referendum vote. Zillow provides data through January 2017 which allows us to analyze both the period before the vote as well as the period after the vote.

I downloaded data from six surrounding North Shore communities (Highland Park, Glencoe, Lake Forest, Deerfield, Winnetka & Northbrook). I compared the 11 months since the Referendum (March ’16 through January ’17) with the 11 months immediately prior to the Referendum (April ’15 through February ’16).

During the 11 months preceding the vote, Zillow’s Housing Value Index for Highland Park increased by 2.5%. This was the highest increase among the 6 North Shore communities. The average change for the other 5 communities was -1.3%. Contrary to Mr. Wolff’s claims, this would suggest that home buyers were not reacting negatively to the plans being circulated by the School District. In fact, the opposite was true. During the period when the Referendum was being widely debated, the Highland Park housing market was the strongest in the area.

For the 11 months after the Referendum, Zillow’s Housing Value Index for Highland Park increased by 0.1%. This was the worst among the 6 North Shore communities. The other 5 cities averaged an increase of 1.9%. Many factors can contribute to this softness in the housing market but I would suggest that the delay and uncertainty created by the defeat of the Referendum was a primary cause.

Mr. Wolff also used this flawed data in an attempt to paint Mayor Rotering in a negative light. So I will leave you with one final set of statistics. During the Mayor’s two terms (May 2011 – current) the housing values in Highland Park have increased 23.8%. That is the greatest rate of change of any of the 6 North Shore communities and 3.4% better than the average.

This data can be easily located and verified at https://www.zillow.com/highland-park-il/home-values/.

Sincerely,

Paul Wehner