Is your area crawling with criminals
But folks have a tendency to focus most on another type of information, at least when it’s available: the identities and locations of local sex offenders. That’s what RealtyTrac has discovered, having observed the behavior of users of neighborhood data website Homefacts.com and property report provider Home Disclosure, each of which are operated by RealtyTrac.
That finding has inspired RealtyTrac to release the “Home Disclosure Registered Criminal Offender Index,” which measures the local concentration of sex offenders – and in some states, other sorts of violent offenders too. RealtyTrac plans to complement the crime rates and existing sex offender data on HomeFacts.com along with HomeDisclosure reports with the index, which will mark the most recent type of sensitive data to be mixed into online real estate search. The index may provide consumers with a better sense of neighborhoods, but it could also cause some headaches for agents.
“I would say most buyers or many buyers would want to know about this information and so being aware of that as a buyer’s agent and getting ahead of that would be a good thing,” said Daren Blomquist, vice president of RealtyTrac.
RealtyTrac introduced the offender index within a report revealing that high concentrations of offenders correspond with low home values as well as foreclosure rates. Its conclusions about the connection between offender concentration and home value appreciation was more nuanced, however.
Registered offenders can mean various things in different states
The index will be based upon the volume of registered criminal offenders as being a percentage of the entire population within a ZIP code. The index ranges from 0 to 100, with a higher index indicating an increased percentage of offenders. It covers 10,000 ZIP codes and will also be featured in a report on at least a quarterly basis.
In most states, only the local density of registered sex offenders is measured by the index. But in some states, the index reflects not only the local concentration of sex offenders, but also the concentration of offender types, including “child predators,” “kidnappers,” “criminals,” “kidnappers,” and “child kidnappers.” That means apples-to-apples comparisons between ZIP codes in some states and ZIP codes in other states aren’t possible. But such comparisons can always can be made between ZIP codes in the same state.
The variance in classification of registered offenders measured through the index “is a challenge using this index,” and reflects RealtyTrac’s decision to incorporate “any criminal offender that the state deems should be registered and that registration accessible to the public,” Blomquist said.
Integration into Home Disclosure and Homefacts.com
The index is going to be woven into RealtyTrac’s Home Disclosure, considered one of a growing number of providers of detailed property reports. Home Disclosure reports have the locations of nearby sex offenders, crime level, school quality, median income, racial makeup, loan and equity information, “fair market rent” and nearby fire stations.
“Some of the feedback we obtain, honestly, is that it’s fairly difficult to find a property without having sex offenders [nearby], especially within one mile; it’s just very, very common to see that,” Blomquist said. That’s why the offender index will add value to Home Disclosure reports, Blomquist said. It will contextualize the other offender data, showing prospective homebuyers whether or not the volume of nearby sex offenders is more or less than usual, he said.
RealtyTrac also plans to surface the index on Homefacts.com, which provides several of the same data as Home Disclosure for neighborhoods and properties. RealtyTrac hasn’t decided how exactly it’s going to incorporate the firm’s offender index into Home Disclosure or Homefacts.com, said Mike Sawtell, general manager of consumer solutions at RealtyTrac.
‘Following all the rules’
Sawtell did say that, in the interest of “following all the rules,” the index won’t show up on for-sale listings that are searchable on Homefacts.com. RealtyTrac learned those rules the hard way in the spring of 2014. The firm added sex offender data to for-sale listings on realtytrac.com at that time just to remove that data – as well as other types of neighborhood data – shortly after.
RealtyTrac purged the data in recognition of the fact that some multiple listing services (MLSs), the source of RealtyTrac’s listings, disapproved of displaying it on listings. Today, visitors can only view certain information, including sex offender data, for for-sale listings on realtytrac.com or Homefacts.com by clicking to view a “complete property report” on listing pages. The tab brings a visitor to a separate property page featuring the information, however, not any MLS data.
Some housing observers also worry that intermingling sensitive data with online real estate search tools could ultimately are designed to aggravate disparities between communities. That may be a stretch for Blomquist, but he did say that “exposing this type of information more conveniently and more transparently could affect certainly decisions and markets.”
Another concern with offender information is that it could be inaccurate or outdated. Offenders may not immediately register their new addresses whenever they move, or perhaps for that matter, register them at all. RealtyTrac mitigates the first risk by updating its offender data – which Blomquist said RealtyTrac assembles from state offender registries using a “proprietary data aggregation strategy” – every two weeks. But the firm can’t address the second risk.
How agents should handle sex offender information
Buyer’s agents often should share certain sex offender information with buyers in states where it’s permitted, according to guidance from NAR and real estate attorneys. That generally means not merely providing notice to buyers of where they can find sex offender information but also sharing any actual knowledge of offenders living close to listings of interest to buyers, NAR and attorneys say.
In addition to disclosing actual information about sex offenders, buyer’s agents must also consider revealing information they may have come across on the state sex offender registry that could be relevant to a client – provided they cite the registry as being the source of the information.
That’s not to say that buyer’s agents are legally obligated to dig up sex offender information for buyers. They’re not, NAR and attorneys say. Any responsibility agents may have to share sex offender information, sources say, ends after they have disclosed only what they already happen to know.
It remains to be seen whether sex offender data could find its way onto other real estate search sites. But considering that RealtyTrac is a provider of neighborhood data to many listing search sites, that prospect is more plausible than ever before. Some listing portals, which Blomquist said he couldn’t name, have expressed interest in Home Disclosure reports, he said.
Connections between offender index and housing markets
RealtyTrac’s report on its offender index saw that average home values and home equity in 2015 were lower in ZIP codes with a higher offender index (ZIP codes having a higher concentration of offenders). Meanwhile, average foreclosure rates in 2015 were higher in ZIP codes with a higher offender index.
Blomquist said in a statement that this provides “concrete evidence that registered criminal offenders pose not only a potential safety risk for homeowners and their families, but also a potential financial risk for what is likely a homeowner’s biggest asset.” But that could be a bit of an oversimplification.
The referenced “financial risk” is mostly corroborated by the correlation between high foreclosure rates and high offender concentrations, Blomquist said. That’s because foreclosures can chip away at the quality of life in a neighborhood – they often aren’t maintained and can portend crime, he said.
However, another common effect of high foreclosure activity, downward pressure on house values, apparently hasn’t taken hold in areas with higher concentrations of offenders, at least in the last 5 years, reported by RealtyTrac’s analysis. Home values have actually increased at a faster rate during the last 5 years in ZIP codes with a higher offender index, RealtyTrac found.
“You may potentially argue that somebody who’s owning for just one to five years, you’re either fine or actually even better off financially if you’re buying within a market having a higher sex offender index,” Blomquist said. It’s only when you look at home appreciation rates over a longer timeline that living near sex offenders seems to negatively affect home value appreciation. Home values in the “lowest-risk” ZIP codes for offenders tended to go up at a faster rate than those with higher concentrations of offenders from 2005 to 2010, according to RealtyTrac.
Ranking markets by sex offender concentration
RealtyTrac released rankings for markets with the highest amount of homes in ZIP codes with a very high offender index along with the highest percentage of homes in ZIP codes having a very low offender index. ZIP codes were placed in one of five risk categories, each representing 20 % of all ZIP codes: very high, high, medium, low and extremely low.
Markets with the highest percentage of homes in ZIP codes having a extremely high offender index were Greenville, South Carolina (73 percent); Columbia, South Carolina (66 percent); Boise, Idaho (66 percent); Pensacola, Florida (60 percent); and Flint, Michigan (57 percent). Major markets where more than one-fourth of all homes were in zip codes with a very high offender index included Detroit (39 percent), Nashville (32 percent), San Antonio (31 percent), St. Louis (31 percent), and Tampa (26 percent).
Markets with the highest percentage of homes in zip codes with a very low offender index were Minneapolis-St. Paul (90 percent); Portland, Oregon (88 percent); Trenton, New Jersey (62 percent); New York (61 percent); and Boston (52 percent). Other major markets where more than one-fourth of all homes were in zip codes with a very low offender index included Phoenix (47 percent), San Francisco (38 percent), Seattle (36 percent), San Diego (35 percent), Miami (29 percent), Los Angeles (29 percent) and Chicago (29 percent).