All Real Estate Is Local: Real Estate Market Indicators The Public Rarely Gets To See
By Christopher Carter - Real Estate Broker Associate
November 23, 2023
Regularly, we see National Real Estate Media Coverage and hear the popular catchphrases of low inventory and high demand. Today we are outlining 3 "stealth" indicators of underlying local Real Estate market activity that are not readily available to the public. They may help provide a more local context and perspective to the generalized comments we hear almost daily about National Real Estate market conditions.
Remember - All Real Estate is local.
The 3 most revealing (in my opinion) indicators are actually sub-categories of Listing History: Days-On-Market (DOM), Price Changes (reductions and increases) and Listing Status changes.
You have to ask your Real Estate Agent to provide Listing History details because they don't automatically show up on consumer-facing listings from the local Multiple Listing Service (MLS) or syndicated sites like Zillow, Realtor.com, Trulia, and others.
Taking a look at Listing History can pull back the curtain on whether individual property listings are...
• Selling relatively quickly or taking longer to go under contract
• Closing near the original or the most recent asking price
• Expiring without selling
• Selling on the first accepted offer or going back to Active after having been Pending or Pending with Contingencies
• Being relisted after Expired or Terminated status
Why does any of this matter? Because it is very important for potential buyers (and existing property owners) to understand the dynamics that affect local market conditions and anticipated property values. National market observations may or may not apply to your neighborhood or community.
Not only is all Real Estate local, it is also dependent on a specific time window of market activity. Conclusions drawn from what happened a month or 2 ago may no longer be valid for a specific area, neighborhood, or community's current market conditions.
Looking at Listing History provides insights that may not be available from the usual sources of market information.
This is the number of days since the listing first went Active in the Multiple Listing Service (MLS). Shorter DOM indicates a fresher listing, longer DOM might indicate reduced interest, too high of an asking price, or just a general slowing of the local market. An individual property's DOM is most useful when viewed relative to that of other properties or communities. When looking at market comps, be sure to ask for their Listing History too. Local DOM numbers can either reinforce or contradict National Real Estate Media Commentary.
Taking a look at a property's asking price reductions since it first hit the market can give a hint as to whether it was originally priced too high, or maybe the sellers are becoming more "motivated" the longer it sits on the market.
Sometimes a reduced asking price is featured in marketing to attract more potential buyers, sometimes price drops are not mentioned because it might cause potential buyers to feel the property was over-priced to begin with.
There are even times when you will see price increases for properties that have been on the market awhile. (I am not making this up.) The motivation and logic for this are unclear, though it always sends the wrong message when potential buyers see price increases in Listing History.
Listing Status Changes
The different MLS categories for Listing Status are usually:
• Active - available for purchase
• Pending - under contract to a specific buyer
• Pending with Contingencies - under contract subject to Inspection, Financing, Appraisal, or other Contingency
• Expired - listing period has ended without a sale, property is no longer shown as available on MLS or syndicated sites
• Withdrawn - temporarily removed from Active status, may return at a later date
• Back-on-market - Active again after being Pending or Withdrawn
• Terminated - no longer offered for sale through the MLS
• Closed/Sold - a completed and recorded sale to a new owner
When viewing Listing History, it is a good idea to notice where in the DOM calendar any status changes occurred. Even more important is to notice "backward" changes from one status to another.
Examples of backward transaction progress might be:
• Pending back to Active (was under contract, then something changed)
• Pending with Contingencies back to Active (ask what the contingency was)
• Expired back to relisted Active (by the same or a different agent)
• Terminated back to relisted Active (by the same or a different agent)
There is even a 4th part of Listing History that is important to watch on Closed sales. That is the relationship between initial (original) asking price and eventual Sold price. You can also take a look at the Sold price compared to the most recent (possibly reduced) asking price.
As a buyer, when you find a property that interests you enough to submit an offer, ask your Real Estate Agent to show you the property's Listing History and discuss the details with you. Compare the individual property's Listing History with that of similar properties in the surrounding area, neighborhood, or community.
And when a property comes through as a "New Listing," be sure to check previous Listing History. Expired and Terminated listings are often categorized as New when re-listed in the MLS.
As a seller considering putting your house or condo on the market, ask your Listing Agent to prepare an overview of your neighborhood, area, or community's Listing History details for the past few months from the MLS. Doing this can help establish reasonable expectations for your own upcoming sale.
The details in a property's Listing History provide the best insight when viewed in relation to those of comparable properties in the local area or community. When doing a Listing History study for comps, include all Listing Status categories in order to get the full picture.
Reviewing The Basics In Today's Article
Listing History provides another layer of information to all the other research buyers should be doing when considering making an offer on a house or condo they like. It can also give sellers more market background when deciding on a realistic asking price and how long they might expect their sale to take.
Listing History details do not automatically appear on feeds you receive from a local MLS or when viewing listings on syndicated real estate sites. You have to ask your Real Estate a Agent to provide them for you.
Remember - All Real Estate is local.
Don't assume that national Real Estate Trends and statistics you see on the evening news automatically apply to your local town, neighborhood, or community. Real Estate activity in your own little corner of the world is best analyzed and interpreted through local indicators, trends, and comparable property sales.
Editor's Note: Christopher Carter is NOT an attorney. He does not give legal advice. For interpretation and application to specific circumstances of anything you read in this article, you must speak with a Florida-Licensed attorney.
Have a question or comment about anything you see here, if so, visit: www.TheFloridaRealEstateBlog.com