I’ll concede the fact that not everyone is as much of a data geek as I am and, in fact, a more accurate statement would probably be that most people are not, including the majority of home buyers and sellers. Â Â Sure, home buyers and sellers are interested in home prices and what the potential value of the home is they are looking to buy or sell, but most leave the real data analysis to their agent. Â After all, part of being a professional real estate agent is knowing the market as well as knowing how to research the market and apply market data to their client’s situation.
However, Â don’t assume all real estate agents are created equal in this regard and that they all know the market as well as they should or do the research they should. Â There are many great agents that do these things very well but there are a bunch, probably an equal number, if not more, that don’t. Â Even the agents that do it well are still limited to the data resources they have available to them.
The MLS is the best source of market data...
The REALTOR® MLS (Multiple Listing Service) is no doubt the best source of home price and sales data as the overwhelming majority of real estate agents are members of the MLS and therefore the MLS has the largest compilation of listing data and sold data.
Every agent that is a member of the MLS has access to this data but, must still know how to properly apply it. Â Plus, even though this is the most accurate source of data there are still some inconsistencies. Â For one, due to the common practices of most agents, new homes are mixed in with existing homes in the MLS. Â Given that an existing home that is, say a 50 years old is not comparable to a new home and therefore must be somehow filtered out. Â This can be done listing by listing when an agent does “comps” on a home, but it is hard to do on a more macro level where a buyer or seller needs an understanding of the overall market.
The data nerds come through!
This probably won’t come as a shock, but the firm I’m a partner in, MORE, REALTORS®, has addressed this issue using the proprietary software we have developed.  Our software was designed specifically for this market and to work specifically with the data from our regional MLS to give our agents the best and most relevant data for them to stay abreast of the market as well as to present to their clients.
What difference does this make?
To illustrate the difference, below are our STL Market Reports for the 63301 zip code (eastern St Charles County) Â presented in two ways. Â The first is based upon the data as agents would obtain it from the MLS or other sources with the new home data mixed in with existing home data and the second is with just existing home data and the new home data filtered out.
As the tables show, there are some fairly significant differences between what the market data shows “raw” versus after we filter out new construction:
- The median home price for the 12-month period ended Dec 31, 2019 drops from $205,000 to $199,000.
- Home sales, instead of showing a 3% increase for the period, show less than a 1% increase
- Then, the biggest and probably most impactful difference has to do with inventory. Â The month’s supply of homes for sale is showing nearly two and a half times higher than what it actually is when you look at our filtered report!
STL Market Report 63301
(click on table for live report)
STL Market Report 63301 – Existing Home Sales Only
(click on table for live report)
[xyz-ips snippet=”Seller-Resources—Listing-Targeted”]
