DOM Snapshot

The MB Market Update spreadsheets are now available. Information in the current updates closed May 31.

Click here to download the 5/31/08 spreadsheets or, at any time, use the link in the upper-right corner of the front page.

We'll do our regular summaries by section soon, but first, here's something we noticed in finalizing the data in this report.

As the month of May came to a close, several listings entered new territory in their days on market, crossing over 100 DOM for the first time, or moving into a new category of multiple hundreds of days.

We'll forgo the customary Redfin links for these just to quickly show you who's moving where:

100+ DOM

1100 John
612 11th
701 Dianthus
815 2nd
131 Kelp
505 3rd
3212 Palm
3516 Palm
848 12th Ct.
794 27th
3500 Blanche

200+ DOM

473 31st
769 33rd

300+ DOM

2509 Walnut

400+ DOM

2509 Palm

500+ DOM

2611 Palm

600+ DOM

2812 Elm

Those last 5 are all in the Tree Section, 4 of them "new" homes – some getting to be less and less new as time marches on.

There's Nothing Like a Deadline

As MBC reported just 10 days ago (hat tip, Kaye Thomas), the merger of the local MLS into a larger one with stricter rules is just around the corner.

That means that, by Feb. 4 – when the merger takes effect – if you haven't pulled a bogus re-list on your longtime listings, it will difficult to refresh the DOM clock again. Agents can't cancel and re-list alone; they'll need broker approval. Experience, we're told, suggests this could mean the end of bogus re-lists.

Just think: Listings will be stuck with their current DOM, plus all the new days the listings accrue in the future.

Despite the imminence of the Feb. 4 deadline, surprisingly few listing agents have taken action in January. Quite a few homes took a week or two off for the holidays and came back "fresh," but almost all holdover listings from before the holiday season have stayed where they were.

But not everyone's missing the deadline. In a flash Tuesday, the new home at 516 24th was re-listed. Out went MLS # S955977, and here came the all-new # S961440. (Click address above for home details via Redfin.)

Now, perhaps this was one of those "new product" re-lists we were reading about the other day in the Daily Breeze. Let's recap the words of a local pro:

"My contention is that when you have a piece of property, and you change it $100,000 in price, it's a new piece of property. It shouldn't be penalized by the number of days on the market that it was at another number. It's a new product."

It seems like the only test proposed here is: Did the price change? By $100k or so?

We might add, as a corollary, did something else change to make it a "a new piece of property" or a "new product?" (Remember, twice we've seen listings literally change their addresses after coming on the market – now that's a change.)

We've got a printout of the old listing for 516 24th. Checking...

Nope, same address, same description and same price ($2.495m) in the new entry. Same listing agent, too. Only difference now is the new DOM (0), replacing 118 DOM, by our count. (The listing started Oct. 4, 2007.) Must be bogus, unless we're missing something.

Now, faithful readers know that MBC is not criticizing the home here, just the re-list. We literally labeled 516 24th as our favorite new home in a Christmastime post (see "Mrs. MBC's Xmas List") and in a follow-on article with photo in the Easy Reader. The style is crisp and beachy, and we were able to see past the lack of a yard and proximity to the school. It seems that the market has rejected the price so far, but someone will be glad to grab this home for the right price later.

As to the 4-5 dozen SFRs west of Sepulveda with ever-higher DOM counts, there's less than a week now to follow the lead of 516 24th, and re-list ASAP. C'mon, folks, deadlines are a time to focus.

Unless you know that it just ain't right.

Just 2 Weeks Left to Re-list!

We believe it, and we don't believe it.

Kaye Thomas reports that, in the imminent merger between our local MLS and a bigger one in SoCal, the practice of bogus re-lists will end.

And the end is near: February 4.

That means that if you didn't already pull a re-list to celebrate the holiday season, you've got just 2 weeks to cancel and restart with a fresh DOM count.

After the merger, individual agents will no longer be able to change a listing's status to "canceled," typically the immediate prelude to a re-list. (The practice is actually called "churning" by the pros. Like many euphemisms, this one hides the meaning a bit too well.)

Only a broker will be able to cancel a listing. Kaye quotes from a memo sent to local MLS members saying that, in other jurisdictions, putting the onus on brokers to take key steps in the "deceptive business practice" of "churning" has "virtually eliminated the practice."

So MBC can (maybe) finally stop writing about DOM and focus on the positives for a while.

Avg. DOM Up Further

As we roll into this new year with a lot of holdover listings, it's probably no great surprise to see average days on market increasing further.

When last MBC reported average DOM from our independent tracking figures, at the end of Q3 2007 (see "Avg. DOM Creeping Up"), the average DOM for all SFRs west of Sepulveda was 110.

Now it's 136. That figure is +50% from the figure at the end of July, and up 25 DOM (+22%) over Sept. 30, 2007.

If you were to look back at the report on DOM by section from then, the big differences are in the Hills and Trees. Then, the Hill Section had a few more listings than the 6 actives now, but one was a super-long-timer (844 11th), and it skewed the average up to 153. With that one now sold, the number stands at more reasonable at 91, exactly the same as the Sand Section figure.

The Tree Section, however, is a whole different story. With average DOM of 160, the figure is now up 50 DOM (+45%) just since Sept. 30, 2007. Within the Trees, the True average DOM for listings <$2m is 127, and for those at $2m+, it's 212. So, remember that if you're looking at new construction in the Trees – if it hasn't already been on market 7 months, it's practically a new listing.

Keep in mind, MBC's True DOM figures won't agree with DOM figures found in every other source. We find the highly technical explanations for bogus re-lists much too confusing, totally beyond our comprehension, so we developed an alternative methodology for counting days on market:

• We note the date a listing begins, and

• We count the number of days from there.

If you were able to follow that, we count the "number" of "days" that a home is "on market." This is not necessarily what "DOM" means to everyone else.

As we have noted elsewhere, technically, according to local MLS rules, a listing must cancel out for 60 days to get a fresh DOM number. A lot of year-end cancellations did not sit out 60 days, so we wind up counting some days that they were not viewable on the MLS. Oh, those silly local rules. Someone's gotta follow them.

We have, however, excluded two anomalous listings: 4419 Highland and 644 33rd, which each began on the MLS pre-completion.

There were two others in the Tree Section $2m+ range that also started pre-completion but which we chose not to exclude, because their current DOM figures were actually helping to lower the average in that segment. We tried to be nice.

A final note: A reader points out that the South Bay Assn. of Realtors issued this press release the other day (click to download, 2pp., PDF), which claims that in December, the average DOM in the whole of the South Bay was a teeny-weeny 58 DOM, actually reduced from December 2006. Either homes are selling like hotcakes outside MB, or there's something fishy about those DOM figures, eh?

CDOM: Flawed Failsafe

Discussion of DOM (days on market) data often opens a chasm between consumers and critics, on the one hand, and real estate professionals, on the other.

The pros tend not to see what all the fuss is about. If we point out that bogus re-listings serve no purpose but to manipulate data the public sees about the RE market, the response is a quiet shrug.

Consider the tin ear displayed by the SoCal MLS consortium when it decided to drop DOM from client reports, and even publicly announced the decision. (MBC chimed in here, and the LA Times ed board here.)

One reason the pros see no problem is that they have their own data field that they trust to cut through the BS of bogus re-listings. It's called CDOM, for "combined days on market." If you work with a realtor, they're confident that CDOM will help them give you the real story.

The rules for our local MLS essentially say you can re-list all you want, reset the DOM for such occasions as a price cut, change in seasons, child's birthday, or any seller whim, but the CDOM field has got to be real. In fact, one of our frequent commenters says it's all but impossible to imagine a way to manipulate the CDOM field.

But it seems the CDOM field is rife with errors nonetheless. Significantly, most errors favor the sellers – meaning the available CDOM figure understates true "CDOM."

Your humble correspondent is not a realtor. MBC doesn't have ready access to the realtors' system.

With a little help, we compiled a snapshot of "CDOM" fields as of Monday, Oct. 1, for active properties identified in our tracking as those that had pulled a bogus re-list since hitting the market. There are 25 such properties (1/3rd of the current inventory), of which 11 had substantial problems with the CDOM field, when compared to MBC's data. Here they are in order of the difference between the True DOM and the CDOM field:

• 117 Highland – began 5/3/07 – True DOM: 165 – CDOM: 153 – diff: 12
• 505 3rd – began 6/25/07 – True DOM: 98 – CDOM: 86 – diff: 12
• 1821 Walnut – began 5/22/07 – True DOM: 126 – CDOM: 105 – diff: 21
• 869 3rd – began 7/30/07 – True DOM: 62 – CDOM: 37 – diff: 24
• 225 39th – began 8/10/07 – True DOM: 51 – CDOM: 21 – diff: 30
• 601 Larsson – began 3/20/07 – True DOM: 194 – CDOM: 157 – diff: 37
• 742 33rd – began 8/24/07 – True DOM: 38 – CDOM: n/a – diff: 38
• 2709 Oak – began 8/15/06 – True DOM: 410 – CDOM: 346 – diff: 64
• 209 42nd – began 10/4/06 – True DOM: 361 – CDOM: 195 – diff: 166
• 232 30th Pl – began 4/10/07 – True DOM: 176 – CDOM: n/a – diff: 176
• 844 11th – began 4/26/06 – True DOM: 521 – CDOM: 207 – diff: 314

We need to note that 232 30th Pl first came up for sale as 3009 Highland, then changed address midstream. (See story here.) Convenient, tho, to have no CDOM entry at all – that avoids the rule saying CDOM is "property-specific." Intriguingly, the same agent repping this listing with no CDOM figure also has 4419 Highland, new construction that has neither a DOM figure nor a CDOM figure.

Can these fields be manipulated? Ask the man.

There was a pleasant surprise in this data. The fortress-like home at 3200 Pacific was on the market last year, dropped off for several months, and came back $450k lower on June 8. (See story here.) MBC shows True DOM as 84 as of Oct. 1, tied to the June 8 start this year. (It has been re-listed since June, on account of some price cuts.) But the CDOM shows 221, reflecting the property's failed attempts last year.

So you see, sometimes the CDOM field can be a well of truth. Just don't count on it.

A 41-Day Wait; A Big Score

At last, there has been a sale in the Trees at $2m+. And this was a big one: Over $3m.

The last reported new escrow in the Trees (from MLS-listed homes) came on July 31 – 2104 Palm, as noted in "A Trickle."

Fully 41 days later, we get the report that new construction on highly desirable 31st St. is in a contingent escrow (717 31st, that is).

Start price on this one was $3.449m on April 19. Three months later, the slate was wiped clean with a re-list and a modest price drop to $3.379m.

(An aside: You think the "CDOM" field ["combined days on market"] seen by realtors is the honest fallback number everyone can trust? Don't believe it – today, we're informed that the CDOM on this home shows 66 days, not the truthful 144 days.)

So, two months after re-listing, and having witnessed the near-stoppage in the market since early August, did the builder offer a significant discount? It would seem willing, qualified buyers in today's market can name their prices. We shall see.

This new escrow raised another important question – what else, from the MLS, has gone into escrow since Sept. 1? Our records say:

• Hill: zero

• Sand: 217 Sea View ($1.520m), 216 2nd (under construction, 1 DOM, $4.699m), 1212 The Strand ($10.9m)

• Trees: 717 31st ($3.379m)

Also, 217 9th St., new construction near downtown, went from sold with a final reported price and closing date, back to pending. We're sort of tiring of this back-and-forth.

So, we count 4 new escrows in our subject market segments (west of Sepulveda, SFRs only). We have a new record for a Tree Section drought – 41 days eclipses 25 days without a sale in the $2m+ segment.

But some folks are happy. And just imagine how those sales will skew the monthly median price when they close. Isn't it a sign of a healthy market when the median price keeps shooting skyward?

Home is Livable Now: Re-List It!

Who knows what situations might come up during a listing that might merit a quick cancel-and-re-list?

Oh, you might have a realtor/developer who just wants to restart the clock, or an address change on the property mid-listing, or this:

Certificate of occupancy just received!!

That's the great, great news on the new construction at 2309 Pacific. After nearly 75 DOM, they can actually legally allow buyers to move into the house. Bravo!

To celebrate, today the sellers got a fresh, new MLS#, replacing tired old S947286 with the much cleaner new S951920.

There was a token reduction, too ($60k to $2.239m) but the certificate of occupancy was the headline. Finally, they're ready for offers!

A Million Hear About DOM Scandal

MBC's readership is high-quality, but it's measured in the hundreds. Today's LA Times, thrown on the driveways of a million people this morning, takes a page from our focus on DOM trickery in a strident staff editorial entitled, "Not-so-open houses."

The piece is an attack on the recent decision by SoCalMLS to cease publishing DOM in client reports. Per the Times:

[T]his is clearly a change that serves nervous home sellers and their agents — the only parties who would be concerned that apparently lengthy days-on-market periods might prompt buyers to make low-ball offers.

Right.

The piece goes on to note the irony that this cutback in information is coming at a time when "the real estate market is experiencing a rapid trend toward transparency." Right again.

Unfortunately, the only online tools referenced are two realtor-driven sites and something called cyberhomes.com, no reference to our favorites, ZipRealty and Zillow – but also no free promo for dreadful Trulia.com.

Since a lot of you aren't going to take the time to read the whole LA Times piece, we shall ruin it for those who do by sharing the closing line:

So here's some advice: When an agent tells you that overpriced starter home you're looking at just listed two days ago, smile, nod and check to see how thick the dust is on the windowsills.

Skepticism is going mainstream.

Some of the Sillier Recent Re-listings

There are all kinds of reasons you, as a seller, might want to re-list your home after a few days or weeks. Don't worry, the local MLS isn't too discriminating as to reasons. It's a laissez-faire system.

• 2822 Ardmore re-listed after 12 days to raise the price by $46,000;
  
  
• 717 31st re-listed when dropping the price by 2%; and

• 3204 Poinsettia kept the price the same, but re-listed after a failed escrow, not wanting a DOM penalty from one week off the market.

Let's go back to these one by one.

Ardmore is being listed by a relative of the seller. They started at $1.299m for this 1,400 sq. ft. bungalow "at the quieter end of Ardmore" (listing). Whoops! There was some intra-family mis-communication ("What?!? You're taking a commission!?!"), and the price needed to go up by 3.5% ($46,000) to $1.345m. With a new MLS #, less than 2 weeks later, all is forgiven.

The 31st St. listing is new construction, almost 90 DOM, and probably overdue for a typical new construction "new listing" treatment. The price drop was $70k on $3.45m, no big news. We've noted before that this one is nice, but lacks outdoor space. They're still chasing the other new construction across the street (712 31st, now in escrow) which hit the market at the same time, with 300+ sq. ft. more interior space, far better outdoor spaces, and some wow factors, last listed at $3.399m. At $3.379m, 717 31st is still high, which the sellers won't admit any sooner than they'll admit they've been around 3 months.

Poinsettia has been around the block. They started at $1.625m last Summer, then quickly reduced to $1.599m and $1.575m. Re-entering the market this year (May 18) at $1.550m, they got a bite in mid-June. Escrow failed and a week or so later, it was time for a fresh listing to hide the more recent history. "Back on the market!" screams the listing, but that will seem strange to average readers for the first few days, when the listing appears to be brand-new.

Giant Price Drop on Elm

Another new listing that isn't so new draws our notice today, because it's down $775,000 from the initial asking price.

A perfectly nice early-90s home – updated in key areas – at 2909 Elm first went on offer November 7, 2006, at $2.8 million. That price was really pushing the envelope, garishly high, for what the home is (5br/4ba, 3450 sq. ft., slightly larger lot at 5600 sq ft).

By springtime, the price was down to $2.495m, and briefly in late June, down again to $2.395m. Even at that level, it was at or above the price of similarly sized, nearby new construction.

In a different market, you could keep waiting to get your price. But in the glutted Tree Section, the writing was on the wall: $2.4m was never going to happen.

Reality intervened. This week: New agent, new MLS number, and a new price: $2.025m.

At the moment, this makes 2909 Elm the lowest-priced home above $2m, and finally it compares favorably with the others at the same price point. (See the MB Market Update spreadsheets for more.) Now, at least, there's a fighting chance of making a sale.

Just had to shake off that extra $800,000.

These cuts brings to mind the shakedown at 108 S. Dianthus, a Hill Section home that sat for nearly 400 days before closing $1.25m below the initial asking price of $4.5m. Yes, it's possible to get your price wrong for a long, long time.

As a buyer, if you knew that Elm had made two steps down – one from a silly price to a semi-defensible price ($-305k), then down again to a more current-market price (-$470k), you might ask: How much lower will they go?!?

That's what re-listing is all about. The new agent doesn't want to answer those questions or otherwise to be saddled with the baggage of this property's listing history, so it's gone. The MLS #R937139, attached to this home since November, was canceled after 240 days, giving way to #S950200.

So please don't ask about the old listing or old prices, or what's motivating the sellers now – that's rude.

How to Hide the Truth About Your Listing

MBC has complained a few times about bogus re-listings. It's time again.

Re-listing is a common practice meant to wipe away the true listing history of a home. The tactic hides true days on market and the history of price reductions (if any) on the property.

The effect is to deprive potential buyers of valuable information, and to cloud the data used by many people to gauge the health or direction of the local real estate market.

Here's an example of how it's done:

Two brand-new, completed homes by the same developer on neighboring lots were put up on offer in late April. They were each assigned their own MLS #'s, and priced just a bit differently:

• 925 27th: S945952, $3.250m
• 927 27th: S945951, $3.285m

A couple of months later, in the glutted Tree Section higher-end market, there were no takers. The seller was ready to make a price reduction on each one.

Today, the "old" listings were canceled. Replacing them:

• 925 27th: S948980, $3.125m (-$125k)
• 927 27th: S948979, $3.195m (-$90k)

Those are "new" listings showing zero days on market at this writing.

Use this public MLS search tool, and you'll only see the new listings. The old ones are lost to the ether.

Use ZipRealty's search (free reg. required), and, for now, both old and new listings come up. Zillow has the updated prices, though it has no MLS affiliation.

Here's a surprise. Look at the site of the listing agent, David White of South Bay Brokers, and – whoops! – you find the old MLS #'s and old prices. 'Twould appear they're busy wiping the public records, printing up new fliers, etc., before updating the in-house stuff.

It won't be long before all records of the "old" prices and start dates are lost. Or that would be the case without MBC, we'd humbly suggest. Plug: Our twice-monthly Market Updates use only the real start date and price.

Savvy local realtor Kaye Thomas wrote just the other day that the local MLS had made a positive change in its report-generation system, showing "combined days on market" (CDOM) rather than mere "days on market" (DOM) in realtors' comp reports.

CDOM, in theory, is not subject to "re-listing" manipulations. But in reality, of course the database is regularly fooled. That's part of why the publicly reported average DOM is near 60 days while the true DOM is closer to 100.

Everyone thinks there are rules that restrict bogus re-listings. You have to be off the market 60 days, or go with a new broker, and so forth.

There's no enforcement, though. Who is going to punish whom? The folks with a stake in accurate, honest information aren't at the table. Caveat emptor.

True DOM: Higher than you know

A new post at our companion blog, Manhattan Beach Market Update, shows that true average days on market for active listings is 58% higher than some sources have said.

In the three regions west of Sepulveda, it's an average of 98 DOM.

The chart says it all, but for more detail on how the chart was created and other considerations and analysis, please see the full, nerdier post here.