HOUSINGNEWS REPORT
THE OFF-MARKET HOUSING MARKET
“As an analyst, the number one question I get asked is, ‘What percentage of homes sold are listed on the MLS?’”, writes Tom Ruff, housing analyst with The Information Market, a subsidiary of the ARMLS. Ruff went on to conclude counties in the Phoenix metro area in the first seven months of 2017 were listed on the MLS. “Does this mean 18.56 percent of the homes sold this year are FSBO (For Sale By Owner)? No, not at all. When we think of FSBOs, we traditionally picture a homeowner that sells their home without using an agent. … Today we have ‘iBuyers’ like Opendoor and Offerpad and for over 20 years we’ve had We Buy Ugly Houses.” that 81.44 percent of all homes purchased in Maricopa and Pinal
comes from within, making it tougher to combat.
Although Ruff admits he believes “it’s impossible to identify a true FSBO from our existing dataset” he does break up non-MLS sales into two categories: FSBO and Pocket listings, which combined he estimates accounted for 13.41 percent of all sales so far in 2017; and BOSA (Buyer offer Solicitation Accepted — his term for iBuyers and other direct buyers), which combined he estimates accounted for 5.15 percent of all sales so far in 2017. By that measure pocket listings, although not as new and flashy as iBuyers, may pose a bigger threat to the dominance MLS. And unlike iBuyers and other tech-centric disrupters, the pocket listing threat
But in a phone conversation with Housing News Report, Ruff
characterized the high share of off-MLS buyers in Phoenix as a natural result of housing market conditions that are more favorable for sellers in general. “It’s something that comes up all the time. It’s something that comes up over the years,” said Ruff. “The two variables that make the biggest determination are new construction and strength of the market. Pocket listings will increase … when the market is strong and new construction (increases).” The Pocket Listings Problem Traditional MLS relationships are being challenged by a growing number of member brokers who believe the fastest and easiest way increase profits is to stop dividing commissions, forget about MLS cooperation, and cut out other brokers. “Off-MLS listings may contribute to the unraveling of the MLS as we know it, and its replacement by a private network that serves to benefit a certain group of participants,” said consultant Stefan Swanepoel in a 2016 report published by NAR called the Definitive Analysis of the Negative Game Changers Emerging In Real Estate – the DANGER Report. “While it’s controversial and its future is uncertain, the growth of off-MLS listings or ‘coming soon listings’ may well blow up the model of cooperation.”
“As an analyst, the number one question I get asked is, ‘What percentage of homes sold are listed on the MLS?’”
TOM RUFF ANALYST, ARIZONA REGIONAL MLS
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OCTOBER 2017 | ATTOM DATA SOLUTIONS
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