Conejo Simi Valley, Moorpark Multiple Listing Service – Flawed Data
Days on market is a number used to try and gage how the market is moving. I am going to point out why this number is becoming very unreliable. Two abbreviations you may hear are Days On Market DOM and Cumulative Days On Market CDOM. Until just a few years ago CDOM was not tracked in the Ventura County Multiple Listing Service. Homes that do not sell start racking up days on market. The longer a home sits on the market , the more potential buyers want to know why that home is not selling. Some listing agents aware of the handicap of a listing with a large days on market count, have been known to cancel a listing or let it expire so the home can be re-listed. As a new listing, the DOM clock is reset to zero, however, the CDOM clock keeps ticking.
When a property is re-listed in an attempt to reset the DOM clock, a data error now enters the picture. The MLS tracks the percentage of the Sale price to the Listed price, but when a property is re-listed this percentage calculation is not based off the original listing price or the prior listing contract (if expired). It is calculated off the current list price which would include any reductions from the original list price. In fact the MLS always calculates the percentage off the current List Price which can seriously skew that percentage ratio.
Let’s look at two properties that this has happened with and how the MLS now presents inaccurate information on these sales.
1768 Mesa Ridge Ave Westlake Village CA was listed for $1,875,000.00 on 6/4/08. The listing expired one year later and was re-listed on 6/3/09 for $1,700,000.00. The price was lowered four times down to $1,300,000.00. The home finally sold for $1,435,000.00 and closed on 9/15/09. The MLS now reports a DOM=103, CDOM=454 and the Sales Price to List price percentage of 110.38%. How can that be? $110.38% ? It should be calculated off the $1,875,000.00 and the Sales Price to List price percentage correct number is really is 69.34%. Even if one could make a plausible argument that the old listing period should not be counted, the second listing period started with a list price of $1,700,000.00 and that is still far below a 110.38% result. Even though the CDOM is listed, the CDOM is left out of the average DOM calculation which is misleading to the true story of the market timing for homes in this price range and area.
Click to Enlarge – Westlake Village Sales Table
1777 Yarnton Street Westlake Village, CA was listed for $1,095,000.00 on 4/29/09. Approximately 60 days later the price was reduced to $1,074,900.00 and the property quickly picked up an offer and sold for $1,075,000.00 after a 60 day escrow. The MLS shows the Sale price to List Price percentage as 100.1% using the reduced list price vs the sale price incorrectly. When using the original list price that Sale to List percentage should be 98.17%. The CDOM and DOM is correct, but the DOM is averaged in with the incorrect DOM numbers presented on homes like1768 Mesa Ridge.
The story of Measa Ridge is that the Sellers tried for a year to get a price for their home that the buyers did not agree with; once the Sellers of Mesa Ridge finally lowered the price to a range that brought out buyers, it sold taking 454 days. The 103 days on market and the 110.38% sale to list percentage that is being used does not tell the real story.
The Story of Yarnton is very similar…..THE SELLERS HAD TO LOWER THE PRICE to get it sold. It did not Sell at 100% of List Pirce.
This is very important to understand as days on market is not revealing a true picture of the actual market condition.
Next time you ask for the numbers, keep in mind that the quick answer just based off a quick look at a standard MLS report is going to reveal number based off the last reduced price vs the final sales price. This market is very different than any other. Lower price ranges are selling faster and closer to asking price that higher end homes. Trying to ascertain market conditions has to be done regionally maybe even hyper-locally and definitely price range specific.
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Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty
Ted Mackel is a top producer at Keller Williams Realty Simi Valley,
specializing in Simi Valley Real Estate