I Have the Latest Data
Or do I? Most real estate agents get their market reports from their local multiple listing services. For the most part, the data contained in the MLS data bases is very accurate. But is it all inclusive?
Here is some data related to home sales that may or may not be on any given MLS:
- For sale by owner transactions may not be recorded on the MLS unless a real estate agent represents the buyer and chooses to enter the transaction into the system. Although most FSBOs are eventually listed, the number which are not listed is higher at certain times in the market cycle. When the market is depressed, many Sellers will attempt to sell on their own to keep their transaction costs low. Likewise, when the market is hot, many Sellers will attempt to sell on their own because they believe that it will be easy to find a Buyer in a hot market.
- New home transactions may not be recorded on the MLS unless the builder uses a real estate firm to market its properties. Even when a real estate agent is used, the transactions may not be included in the MLS. The MLS listings may just be representative of certain model types that the builder is offering or simply for advertising purposes. A development with a hundred lots may have five different listings, which eventually are withdrawn when the development is complete.
- Some real estate brokerages offer varying levels of service. While most will involve listing on the MLS, some lesser options do not include a MLS listing.
- The numbers are even higher for rentals which are not included on the MLS. Other websites, such as craigslist are much more popular for renters who are looking for a place. The landlords have learned this and are advertising accordingly.
Also, not included in the MLS is the movement of people and other key demographic information. This is just as important as past performance of the market. For instance, not found on the MLS are the following:
- The number of jobs which have been lost or created in the region.
- The number of employers moving into or expanding in the region or the number which is moving out of or downsizing in the region.
- The number of people who are moving into retirement communities or nursing homes.
- The number of people relocating to or out of the region.
- Demographic data such as age, income levels, and family size which all have a bearing on home sales.
Most of this data can be found, but the MLS is not the one stop source for all of this information which is critical to understanding the real estate market.
