It’s not a San Francisco based study, and we haven’t had a chance to review the research, but a plugged-in tipster directs us to a report on the impact of eliminating the ability to reset “days on the market” for a property’s listing.
In April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property’s “days on market” to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group.
We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property’s days on market.
A percentage rather than absolute impact might have be more meaningful. And while the San Francisco Association of Realtors does not prohibit the relisting practice, it is supposed to enforce a one month waiting period between relistings (unless the broker has changed).
As we originally wrote in 2006 when the National Association of Realtors responded to an inquiry into the practice:
We begrudgingly accept the practice, but to justify it by taking the position that “MLSs [and by extension their listings] are not considered advertising vehicles?” Sorry folks, but that’s an utterly asinine argument. And it’s disappointing to say the least.
At the risk of pointing out the obvious, consider any marketing materials, websites, or press releases that reference an MLS derived statistic such as average days on the market (DOM), or selling price to list price ratio (SP/LP). If any of the underlying data has been “refreshed,” do these statistics really “present a true picture” and representation of the market?
Now back to 2011 Golden Gate Avenue and its official
370 37 days on the market and $595,000 under $1,000 over asking sale.
∙ Days on Market and Home Sales (pdf) [netinst.org]
∙ Sorry NAR, But No [SocketSite]
∙ From Flippy To Floppy And A Cliché For 2011 Golden Gate Avenue [SocketSite]