Comments on: Making Magic Happen: The Scoop on List vs. Sold Prices http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html Redfin Bay Area Sweet Digs Tue, 07 Feb 2012 16:59:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: susan.brady http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7904 susan.brady Fri, 26 Sep 2008 14:42:10 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7904 Boy, a lot sure happened after I logged off last night. I am still of the opinion that all data matters, but not in isolation. The list v sold price is interesting, and it is a tool to use along with current comp pricing ($ price plus price per sf), and other factors. Ultimately a good agent will help guide the pricing process so you don't overpay in this market, but in searching for a home, these indicators help a buyer get a feel for the market. Boy, a lot sure happened after I logged off last night. I am still of the opinion that all data matters, but not in isolation. The list v sold price is interesting, and it is a tool to use along with current comp pricing ($ price plus price per sf), and other factors. Ultimately a good agent will help guide the pricing process so you don’t overpay in this market, but in searching for a home, these indicators help a buyer get a feel for the market.

]]> By: Drew Morgan http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7901 Drew Morgan Fri, 26 Sep 2008 09:24:04 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7901 You said”, Independent numbers from Data quick, property shark, or Case-shiller or something else provides the only viable sources for me. Data quick pulls from county records which include non-arm’s length transactions (i.e. inter-spousal transfers, Quit claims, etc. and has its own flaws. Property shark is a mash-up of county records, etc. Case Shiller uses OLD data which is good at looking at Macro long term trends, but does little for the people in the trenches looking at real time information (Listen to my podcast on their methodology). MLS is pulls data on homes trading hands in the open market. Whatever you think about Realtors, their data is controlled so as to be as accurate as possible—and timely. You said,”Inventory is key, yes. DOM is key, but not a reliable statistic unless you have the time and ability to mine the data yourself, or you really have a trustworthy agent (big IF, sorry but it’s true). We do. And it’s on our web page for everyone to see. I have no agenda, no horse in this race. The market is what it is but people who do not understand the nuances are being spun right into somebody’s agenda. Look for yourself, we talk about the median price being distorted (up), and take action to get at the real numbers. An in the oath of honesty, I cannot assit you in getting to the real numbers in your area--they are out of mine. More buyers should be able to get at what I do for the Peninsula. Good blogging with you. I can send you raw data for over there if RF doesn't mind. I heard they haven't gone back that far. You said”, Independent numbers from Data quick, property shark, or Case-shiller or something else provides the only viable sources for me.
Data quick pulls from county records which include non-arm’s length transactions (i.e. inter-spousal transfers, Quit claims, etc. and has its own flaws.
Property shark is a mash-up of county records, etc.
Case Shiller uses OLD data which is good at looking at Macro long term trends, but does little for the people in the trenches looking at real time information (Listen to my podcast on their methodology).
MLS is pulls data on homes trading hands in the open market. Whatever you think about Realtors, their data is controlled so as to be as accurate as possible—and timely.
You said,”Inventory is key, yes. DOM is key, but not a reliable statistic unless you have the time and ability to mine the data yourself, or you really have a trustworthy agent (big IF, sorry but it’s true).
We do. And it’s on our web page for everyone to see. I have no agenda, no horse in this race. The market is what it is but people who do not understand the nuances are being spun right into somebody’s agenda.
Look for yourself, we talk about the median price being distorted (up), and take action to get at the real numbers.

An in the oath of honesty, I cannot assit you in getting to the real numbers in your area–they are out of mine. More buyers should be able to get at what I do for the Peninsula.

Good blogging with you. I can send you raw data for over there if RF doesn’t mind. I heard they haven’t gone back that far.

]]> By: dg http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7900 dg Fri, 26 Sep 2008 09:03:07 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7900 Drew, I just posted my reply before reading your 2nd post. We were typing at the same time obviously. Ha. I checked out your site a little. I like what you have on a localized version of the Case-Shiller. I love the C-S reports on a macro-level also, because it is the best method out there for reporting and tracking. But it does not help me on a local level as you mention. I wish you were doing your data mining and reporting in the areas I am interested in - Oakland/Berkeley and San Francisco. I commend you for doing this work on a local level. I have yet to see anyone else do it. I wish you or someone would do it for my areas of interest! Drew, I just posted my reply before reading your 2nd post. We were typing at the same time obviously. Ha.

I checked out your site a little. I like what you have on a localized version of the Case-Shiller. I love the C-S reports on a macro-level also, because it is the best method out there for reporting and tracking. But it does not help me on a local level as you mention. I wish you were doing your data mining and reporting in the areas I am interested in – Oakland/Berkeley and San Francisco.

I commend you for doing this work on a local level. I have yet to see anyone else do it. I wish you or someone would do it for my areas of interest!

]]> By: dg http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7898 dg Fri, 26 Sep 2008 08:57:38 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7898 Drew, my apologies. I came off a little harsh and should not have put words in your mouth. Not fair. Substitution is a real thing going on right now I very much agree. I know of many in SF who have already decided their substitute of a nice house in the hammered Oakland market was a better alternative than their condo/loft/small SFR/etc in SF. I, as well as several friends, are also contemplating this exact move. Just one example. Inventory is key, yes. DOM is key, but not a reliable statistic unless you have the time and ability to mine the data yourself, or you really have a trustworthy agent (big IF, sorry but it's true). I personally do not trust anything from the MLS, especially mass data reports because too much blended crap in with the good. Independent numbers from Dataquick, propertyshark, or Case-shiller or something else provides the only viable sources for me. Median price really is not worth watching if you are looking for a home. It really has no bearing. Comps do. Recent comps. You could be in a zip code or county or city where the median is much lower or much higher than the houses you are looking at, so what does that tell you? Absolutely Nothing. Neighborhoods and developments within a certain locale (for median purposes) vary greatly so this matters not. The median price is fodder for the MSM to print and talk about and create stories. It means something to economists, etc but is not valuable to Joe Homebuyer as he searches for his next home. Cheers! Drew, my apologies. I came off a little harsh and should not have put words in your mouth. Not fair.

Substitution is a real thing going on right now I very much agree. I know of many in SF who have already decided their substitute of a nice house in the hammered Oakland market was a better alternative than their condo/loft/small SFR/etc in SF. I, as well as several friends, are also contemplating this exact move. Just one example.

Inventory is key, yes. DOM is key, but not a reliable statistic unless you have the time and ability to mine the data yourself, or you really have a trustworthy agent (big IF, sorry but it’s true). I personally do not trust anything from the MLS, especially mass data reports because too much blended crap in with the good. Independent numbers from Dataquick, propertyshark, or Case-shiller or something else provides the only viable sources for me.

Median price really is not worth watching if you are looking for a home. It really has no bearing. Comps do. Recent comps. You could be in a zip code or county or city where the median is much lower or much higher than the houses you are looking at, so what does that tell you? Absolutely Nothing. Neighborhoods and developments within a certain locale (for median purposes) vary greatly so this matters not.

The median price is fodder for the MSM to print and talk about and create stories. It means something to economists, etc but is not valuable to Joe Homebuyer as he searches for his next home.

Cheers!

]]> By: Drew Morgan http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7896 Drew Morgan Fri, 26 Sep 2008 08:55:24 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7896 Sorry for the double post. As to your comment, “And median is not a good statistic to follow either. Especially now as the mix of homes selling is what is important, which is unfluenced greatly by the credit crunch and foreclosures.” But what if you could account for the mix? My answer is we make adjustments to take into consideration these factors in our analysis. We look for distressed sales and periods where large or smaller homes are selling to get to the real median values. It’s all on our blog page for you to see. And if I may add, no one is doing this analysis to the extent we are. Raw data will not tell you the true median price drop. Our calculations are much more thorough, detailed and enlightening than Standard & Poor's, much to the dismay of the real estate industry. These are two enlightening articles I did where we discuss: How to determine the True Median Price http://beautifulmountainblog.typepad.com/beautiful_mountain_blog/2008/09/median-price-me.html How to adjust for larger or smaller homes selling http://beautifulmountainblog.typepad.com/beautiful_mountain_blog/2008/01/adjusted-belmon.html Sorry for the double post.
As to your comment, “And median is not a good statistic to follow either. Especially now as the mix of homes selling is what is important, which is unfluenced greatly by the credit crunch and foreclosures.”
But what if you could account for the mix?
My answer is we make adjustments to take into consideration these factors in our analysis. We look for distressed sales and periods where large or smaller homes are selling to get to the real median values.
It’s all on our blog page for you to see. And if I may add, no one is doing this analysis to the extent we are. Raw data will not tell you the true median price drop. Our calculations are much more thorough, detailed and enlightening than Standard & Poor’s, much to the dismay of the real estate industry.
These are two enlightening articles I did where we discuss:
How to determine the True Median Price
http://beautifulmountainblog.typepad.com/beautiful_mountain_blog/2008/09/median-price-me.html
How to adjust for larger or smaller homes selling
http://beautifulmountainblog.typepad.com/beautiful_mountain_blog/2008/01/adjusted-belmon.html

]]> By: Drew Morgan http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7895 Drew Morgan Fri, 26 Sep 2008 08:52:45 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7895 Sorry for the double post earlier. As to your comment, “And median is not a good statistic to follow either. Especially now as the mix of homes selling is what is important, which is unfluenced greatly by the credit crunch and foreclosures.” But what if you could account for the mix? My answer is we make adjustments to take into consideration these factors in our analysis. We look for distressed sales and periods where large or smaller homes are selling to get to the real median values. It’s all on our blog page for you to see. And if I may add, no one is doing this analysis to the extent we are. Raw data will not tell you the true median price drop. Our calculations are much more thorough, detailed and enlightening than Standard & Poor's, much to the dismay of the real estate industry. These are two enlightening articles I did where we discuss: How to determine the True Median Price How to adjust for larger or smaller homes selling Sorry for the double post earlier.

As to your comment, “And median is not a good statistic to follow either. Especially now as the mix of homes selling is what is important, which is unfluenced greatly by the credit crunch and foreclosures.”

But what if you could account for the mix?

My answer is we make adjustments to take into consideration these factors in our analysis. We look for distressed sales and periods where large or smaller homes are selling to get to the real median values.

It’s all on our blog page for you to see. And if I may add, no one is doing this analysis to the extent we are. Raw data will not tell you the true median price drop. Our calculations are much more thorough, detailed and enlightening than Standard & Poor’s, much to the dismay of the real estate industry.
These are two enlightening articles I did where we discuss:
How to determine the True Median Price
How to adjust for larger or smaller homes selling

]]> By: Drew Morgan http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7894 Drew Morgan Fri, 26 Sep 2008 08:34:47 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7894 DG—With all due respect, you do not know me, yet you choose to deride my comments. You said: “Drew, you could not be more wrong. Of course people overprice their homes. That happens in any market, not just a declining one like now. Irrelevant. You probably think the “30% over asking!” marketing claims by many realtors in the escalating market of recent boom years was good info too huh. Please.” Please what? Don’t try to spin my words; what you are doing is transparent. I DO NOT think 30% over asking is what to offer; in fact what I am saying is that it may be 30% or more under asking—especially when sellers overprice. What buyers need to do is pay attention to the principle of substitution. For example, if a buyer has seen ten homes they like better for less, that’s a good benchmark. Buyers need to educate themselves as to relative value. They need to see the entire inventory and then weigh the stats as one factor. The seller’s list price and the percent they receive has NOTHING to do with intrinsic value. If you like to watch statistics, you need to weigh: • The Month’s inventory (will help you know if your area is in a buyer's or seller’s market). • The days it takes to sell a home—coupled with the percent the seller receives of asking • The Median price IS important because even if all of the other indicators are in the sellers favor, if homes are selling for less, but at a high percentage of asking, then they are selling at a high percentage of a lower price. The percent of list price that sellers are receiving should have no bearing whatsoever on what you offer for a home. The home is worth what the home is worth. It’s up to buyers to know what homes are worth. You are right in that the DOM stat changes which again, is why it is so unimportant. It only tells you that when the seller gets close to real market value, what happened. Did the seller under price their home to get bidding wars? DG—With all due respect, you do not know me, yet you choose to deride my comments.
You said: “Drew, you could not be more wrong. Of course people overprice their homes. That happens in any market, not just a declining one like now. Irrelevant. You probably think the “30% over asking!” marketing claims by many realtors in the escalating market of recent boom years was good info too huh. Please.”
Please what? Don’t try to spin my words; what you are doing is transparent. I DO NOT think 30% over asking is what to offer; in fact what I am saying is that it may be 30% or more under asking—especially when sellers overprice.
What buyers need to do is pay attention to the principle of substitution. For example, if a buyer has seen ten homes they like better for less, that’s a good benchmark. Buyers need to educate themselves as to relative value. They need to see the entire inventory and then weigh the stats as one factor. The seller’s list price and the percent they receive has NOTHING to do with intrinsic value.
If you like to watch statistics, you need to weigh:
• The Month’s inventory (will help you know if your area is in a buyer’s or seller’s market).
• The days it takes to sell a home—coupled with the percent the seller receives of asking
• The Median price IS important because even if all of the other indicators are in the sellers favor, if homes are selling for less, but at a high percentage of asking, then they are selling at a high percentage of a lower price.
The percent of list price that sellers are receiving should have no bearing whatsoever on what you offer for a home. The home is worth what the home is worth. It’s up to buyers to know what homes are worth. You are right in that the DOM stat changes which again, is why it is so unimportant. It only tells you that when the seller gets close to real market value, what happened. Did the seller under price their home to get bidding wars?

]]> By: Drew Morgan http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7893 Drew Morgan Fri, 26 Sep 2008 08:31:33 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7893 DG—With all due respect, you do not know me, yet you choose to deride my comments. You said: “Drew, you could not be more wrong. Of course people overprice their homes. That happens in any market, not just a declining one like now. Irrelevant. You probably think the “30% over asking!” marketing claims by many realtors in the escalating market of recent boom years was good info too huh. Please.” Please what? Don’t try to spin my words; what you are doing is transparent. I DO NOT think 30% over asking is what to offer; in fact what I am saying is that it may be 30% or more under asking—especially when sellers overprice. What buyers need to do is pay attention to the principle of substitution. For example, if a buyer has seen ten homes they like better for less, that’s a good benchmark. Buyers need to educate themselves as to relative value. They need to see the entire inventory and then weigh the stats as one factor. The seller’s list price and the percent they receive has NOTHING to do with intrinsic value. If you like to watch statistics, you need to weigh: • The Month’s inventory (will help you know if your area is in a buyers or seller’s market). • The days it takes to sell a home—coupled with the percent the seller receives of asking • The Median price IS important because even if all of the other indicators are in the seller favor, if homes are selling for less, but at a high percentage of asking, then they are selling at a high percentage of a lower price. The percent of list price that sellers are receiving should have no bearing whatsoever on what you offer for a home. The home is worth what the home is worth. It’s up to buyers to know what homes are worth. You are right in that the DOM stat changes which again, is why it is so unimportant. It only tells you that when the seller gets close to real market value, what happened. Did the seller under price their home to get bidding wars? http://www.morganhomes.com DG—With all due respect, you do not know me, yet you choose to deride my comments.
You said: “Drew, you could not be more wrong. Of course people overprice their homes. That happens in any market, not just a declining one like now. Irrelevant. You probably think the “30% over asking!” marketing claims by many realtors in the escalating market of recent boom years was good info too huh. Please.”
Please what? Don’t try to spin my words; what you are doing is transparent. I DO NOT think 30% over asking is what to offer; in fact what I am saying is that it may be 30% or more under asking—especially when sellers overprice.
What buyers need to do is pay attention to the principle of substitution. For example, if a buyer has seen ten homes they like better for less, that’s a good benchmark. Buyers need to educate themselves as to relative value. They need to see the entire inventory and then weigh the stats as one factor. The seller’s list price and the percent they receive has NOTHING to do with intrinsic value.
If you like to watch statistics, you need to weigh:
• The Month’s inventory (will help you know if your area is in a buyers or seller’s market).
• The days it takes to sell a home—coupled with the percent the seller receives of asking
• The Median price IS important because even if all of the other indicators are in the seller favor, if homes are selling for less, but at a high percentage of asking, then they are selling at a high percentage of a lower price.
The percent of list price that sellers are receiving should have no bearing whatsoever on what you offer for a home. The home is worth what the home is worth. It’s up to buyers to know what homes are worth. You are right in that the DOM stat changes which again, is why it is so unimportant. It only tells you that when the seller gets close to real market value, what happened. Did the seller under price their home to get bidding wars?

http://www.morganhomes.com

]]> By: dg http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7892 dg Fri, 26 Sep 2008 08:17:27 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7892 ^^^ Jackie, I'm sorry but I really don't think so. Nothing commonly held about it. You have most sellers thinking their house is worth X and most buyers thinking it is worth 80-90% of X. This is why we have high DOM, multiple reductions, and many houses being pulled off the market and attempted to be rented. Prices, especially in this market, are largely affected by the individual motivation of a particular house's owners. Looming foreclosure? Hurry to sell before prices really crash? Etc etc. There are plenty of deals out there in certain areas based on the urgent needs of the sellers, and there is still overpricing in areas where the sellers are unrealistic of the market value and have no clue or good guidance from their realtor. These people are not getting their homes sold and pull them of the MLS and try again later (hey, new listing and new lower "original asking price!") or they try to rent it out. ^^^ Jackie, I’m sorry but I really don’t think so.

Nothing commonly held about it. You have most sellers thinking their house is worth X and most buyers thinking it is worth 80-90% of X. This is why we have high DOM, multiple reductions, and many houses being pulled off the market and attempted to be rented.

Prices, especially in this market, are largely affected by the individual motivation of a particular house’s owners. Looming foreclosure? Hurry to sell before prices really crash? Etc etc. There are plenty of deals out there in certain areas based on the urgent needs of the sellers, and there is still overpricing in areas where the sellers are unrealistic of the market value and have no clue or good guidance from their realtor. These people are not getting their homes sold and pull them of the MLS and try again later (hey, new listing and new lower “original asking price!”) or they try to rent it out.

]]> By: Jackie Aldridge http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html/comment-page-1#comment-7890 Jackie Aldridge Fri, 26 Sep 2008 07:00:48 +0000 http://blog.redfin.com/sfbay/2008/09/making_magic_happen_the_scoop_on_list_vs_sold_prices_.html#comment-7890 Perhaps there's a commonly held perception of what the correct price for a house should be. And when the right number is offered, that house is snapped up. Perhaps there’s a commonly held perception of what the correct price for a house should be. And when the right number is offered, that house is snapped up.

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