Monday, February 12, 2007

Fresh On The Market

by Osman Parvez

Last year, I wrote a piece on the issue of refreshed listings. It's when a seller (or their agent) pulls the property off the MLS and then reinserts it with a new MLS number, making it appear as if the listing was "new" on the market and restarting its days on market (DOM) statistic.

A few weeks ago, Business Week even ran a story about it. The rationale?
When many homes in an area are re-listed as new, it skews the "average days on market" statistic, making the market look healthier than it really is. For sellers, refreshing a listing can also disguise the fact that the previous listing was at a higher price. Buyers often regard a price cut as a sign of weakness.
This past spring, I took a look at withdrawn and expired listings. While buyers should uncover this deception as part of pre-purchase due diligence, the fact is that there's no quick and easy way to track refreshed listings on the MLS as a whole. Withdrawn and expired listings are similar to refreshed listings, both are a good indicator of how much unsold inventory is floating around. A big increase suggests that there are many "refreshed" listings on the market.

My piece last Spring looked at the first four months of the year and found no substantial increase for 2006. A few days ago, I decided to see how things looked over the past few months. The analysis below looks at sales data over the past three years.










As you can see from the chart, sales volume of single family homes over the last 3 months hasn't changed from the previous year. 164 units. It's also up slightly from 2004/05. Meanwhile median sale price dipped slightly and median days on market (DOM) increased from 76 to 89 days.

Now let's look at withdrawn and expired single family home listings in Boulder.












Remember, when I looked at this last Spring there was no difference. Now that's changed substantially. There were 142 (RED) withdrawn or expired listings this year, up from 89 in 2005/06. It's likely that many (probably most) of these homes pop back up onto the MLS in the next few weeks as we head into the spring selling season.

If you downloaded my Boulder sales analysis for December, you saw inventory levels at the end of the year had dipped back to 2004 levels but were still running about 25 or so homes above 2005 levels. As these homes make their way back onto the market this year, I suspect we're going to see another surge in inventory levels this summer (similar to last year). For buyers, it's a good thing because it strongly suggests another buyers market this year at most price points. For sellers? Well, as I noted in my recent post about when to sell, it's probably a good idea to get moving a little faster this year.

Now let's look at town homes and condos (attached dwellings) in Boulder on the same basis.










Here we see that sales volume swung sharply downward as compared to the previous year. Only 112 properties sold in the 3 month period. Median sale price was up slightly from the same time last year and median days on market was back to 2004/05 levels.

Now let's look at withdrawn and expired listings during the same period.











In this case, the number of withdrawn/expired listings was actually down from last year. Meanwhile median DOM for expired/withdrawn listings was up to nearly 136.

Taken together, this information paints a mixed picture. It's tempting to conclude that if all things were held the same, the market for town homes and condos will be somewhat better this summer than last year and the market for single family homes, somewhat worse. But I'm not sure that will be the case.

If there's one thing you should take away from all of this, it's that the phenomenon of "refreshed" listings is real and should be dealt with cautiously. As we've worked with buyers ready to make an offer, we've found a bunch of it this year. And by the way, that's when it really matters.

If you're getting ready to buy or sell, ask your real estate agent to check the property information carefully to determine the true listing and ownership history. It takes a little extra work to search records of the MLS in a few different ways, but it helps you get the full picture. If you're an agent, watch for refreshed listings when you're advising your clients. If you're a buyer or seller and need assistance with due diligence, seeking to accurately value a property for purchase or sale in current market conditions, feel free to contact me at 303.746.6896.

Image: Sister72


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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

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