How Many Sales Really Come Via the MLS?

In the post below (So Few Really New Listings), a few commenters raised the question about how many sales come through the Multiple Listing System. The number bandied about among Realtors is about 80% to 85%, but I don't think I've ever seen a validation of that number for Sullivan County. So I decided to don my data junkie hat and find out.

Let me start by saying it wasn't easy. I thought I could just do some data pulls from different sources, combine them into a database, stir in some simple programming to eliminate duplicates and voila! The percentages of sales by source would magically appear on my screen.

Yeah, right. I started on this little project Monday morning, and didn't finish until the sun set. I started by pulling all single family sales (Class: residential-single family) with closing dates between 7/1/2009 and 9/30/2009 for Sullivan County from Reallist, the property records system from First American Title. Some sales I knew had closed were missing from the list, and figured out I had to add in a second class, rural residential, and ran the data again.

So far, so good. There were 167 recorded sales. But, alas, all weren't "arms length" market sales. 10 were title transfers from the county tax auction. 3 were foreclosure transfers of title back to the bank (not foreclosure sales from the bank to an ultimate purchaser, which I did include in the arms-length market sales group.) I categorized a further 12 as not-arms-length sales. How? By checking each sales record, looking for same last names as buyer and seller, sales with no dollar amount where it appears there has been an in-family transfer, and sales from one real estate or corporate entity to another with no change in tax address. There were also a couple of transfers of property into conservancies or family trusts.

Pulling out these tax sale and non-arms length transactions, I ended up with 143 "arms length" sales. Then I pulled data from another source, the tax records system (not the sales system) of the Greater Hudson MLS to double check, and alas the numbers didn't match. I identified an additional 11 sales that hadn't been recorded yet as closed in Reallist but were recorded as closed in the tax records in the other system. So I added those in.

I came up with a total of arms-length, non-tax-auction single family residential sales (excluding mobile homes and seasonals) in Sullivan County between 7/1/2009 and 9/30/2009 of 154. At least that's my best guess.

Then I started the process of coding those sales as to whether they were sold through the Sullivan MLS, the adjacent Greater Hudson MLS (which covers some sales in Sullivan by brokers in adjacent counties that aren't members of the Sullivan MLS), or didn't appear in either MLS, and would be non-MLS sales, whether they were handled by a broker or not.

It turned out this, too, couldn't be done in an automated way because of inconsistencies in the way parcel identifiers and addresses are entered into the different systems. So again I went through transaction by transaction, matching the compiled master sales list with the solds from the Sullivan MLS and Greater Hudson MLS.

At the end this is what I came up with. Of 153 arms length transactions, 104 (68%) were sold through the Sullivan MLS. Some of those were also included in the Greater Hudson MLS totals, because some Realtors belong to both systems. Pulling the dupes out of the GHVMLS data, I ended up with an additional 18 sales (12%) that were only in the Greater Hudson MLS. The majority of the GHVMLS-only sales were in a single township, Mamakating, that borders Orange County. So the percentage of arms length sales that were MLS-sourced (either Sullivan or GHVMLS) came to 80%, with 20% not appearing in an MLS.

One question that may arise is why I didn't use more recent data, and went back to the 3rd quarter of 2009. The reason is that it takes so long for sales to catch up, be recorded by the county and then be picked up by the third party property records systems like First American and included in their databases. Using a more recent period, I would have had to make even more judgement calls to fill in the gaps.

Comments

[Jeffrey Morgan]

Because sales are so infrequent nowadays, realtors are hoarding their listings as excusives more often than during the bubble years. This is due to the increased cost of having an overpriced listing sit on the MLS and also to avoid co-broke.