News about the real estate market is huge these days. There is a lot of talk about prices going down, sales going down, and lots of numbers to prove the point. But, are these numbers legit?
I use the Big Bear MLS to substantiate a lot of the real estate data that I provide on the Skinny. Pulling sales data from the MLS only provides part of the story however.
One of the biggest problems with the Big Bear MLS data is that it does not include all of the sales in the area. Along with the increase in REO properties for sale comes the increase in properties that are listed by out of area agents who do not put their listings into our MLS. If the property sells, our MLS does not show it. It also does not show any properties sold between private parties or by owner.
Hello public records. In a perfect world, public records will catch all of the sales (deed recordings) that occur, regardless of which MLS it is in, or if the property is sold by owner. Whenever a property is transferred to a new owner, a deed is recorded at the local County recorder’s office. This is a public document that can be tracked and found by any title company and/or companies that specialize in researching these type of documents.
Why is this important? It is only important if you want accurate statistics about a particular real estate market. If you are okay with part of the truth, or some generalizations, then it probably won’t matter that much. I prefer to be as accurate as possible.
For comparison, the Big Bear MLS shows that there were 82 homes sold in the Big Bear area during the month of September 2008 while the public records show 94 sales during the same time, a 13% difference. Not a big deal when you are talking about 1 month, but when you add that up over a whole year, 13% more sales will help any market look better.
And in fact, year to date (1/1/08 – 9/30/08) the Big Bear MLS is showing 496 home sales while the public records shows 572 home sales, a difference of 76 homes sales, or 13%!
If you take a look at the past couple years (Jan. to Sept.), it looks like this:
|Year||# of Homes Sold Per MLS||# of Homes Sold Per Public Records||# Difference||% Change|
Public records are not always reliable. If you are using it to rely on the square footage, year built, or beds & baths count for a house, then you are bound to run into discrepancies. Just ask sites like Zillow. But, when it comes to recorded sales, public records are as accurate as you will find.
For agents, MLS data does have it advantages. It is easier to use and to find the data you are looking for. But for consumers, it can be difficult to get.
If you have questions about a particular real estate market, or are just wanting to do some research about market conditions, make sure to keep these things in mind when doing so.
What a big difference in numbers! Do these recordings include interspousal transfers or transfers from individual parties to trusts? Just curious. Thanks.
Nope, these were strictly sales between sellers and buyers. In total, including all type of transfers (those going back the bank, between spouses, and so on), there were 229 deed recordings in Sept. 2008
Thank you for pointing to an important fact about real estate numbers. It highlights the fact that consumers are always better off working with a savvy real estate agent who knows that information comes from many sources and also knows how to interpret that information. I’ll look forward to reading more.
Sold a house for 580k, saw real estate sites updated sold price as 585k. Got a bit worried that the broker/agent pocketed 5k. Then after waiting almost 2 months saw public record updated transaction as 580k, which allows me to relax a bit. Tho, real estate sites now show 2 conflicting sold prices – one from MLS and one from public record. Is this normal? What could typically be the cause of such discrepancy?
In my experience, these transactions that are not at arms length take up a majority of non-mls sales and therefore cannot be relied upon. The most reliable data is the MLS where there is consistency in reported data.