Reports about the median rents rising or falling in a community garner a lot of attention, but it's a good idea to understand where the data is coming from.
Daniel Hertz of City Commentary has a warning for journalists using stats about average or median rents in a city—be aware that the information used to compile such statistics may be lacking significant amounts of data. Hertz writes that the numbers can often be skewed due to the absence of listings that never make it to Craigslist or other rental web sites.
For a number of reasons, just taking the average of all the listings you can find is likely to produce extremely skewed results, with numbers much higher than true average home prices. For one, many apartments, especially on the lower end of the market, aren’t necessarily listed in places that are easy to find—or at all. Instead, landlords find tenants with a sign on a fence or streetlight pole, local (and not necessarily English-language) newspapers, or just word of mouth.
Hertz cites the example of a rent report for the city of Chicago compiled by web site Zumper. Zumper's data skews toward the more expensive listings found in just a handful of neighborhoods, while the cheaper rental listings found in other neighborhoods are missing. Why? Hertz believes that the publicly available listings that web sites like Zumper are accessing are those on the higher end of the spectrum: "Zumper takes the median from its listings, without compensating at all for the fact that its listings are disproportionately concentrated in higher-end neighborhoods."
FULL STORY: Journalists should be wary of “median rent” reports
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