Portland’s Market Time Stats to Increase — Dramatically
September 11th, 2008
When the RMLS Market Action arrives next week, more-than-casual market observers may raise an eyebrow at the ‘average market time’ statistic for Portland-area real estate, ‘cuz it’s gonna be higher than usual.
If you recall, in July the average time to sell a home in the Portland metro was reported to be 72 days — a little over 2 3 months. This statistic was derived by counting the total days from the listing date to the date when an offer was accepted (the pending date). Sounds simple, right?
Well, the reality is that properties can be listed, then relisted by the same agent, then expire, then get listed with a new agent, and repeat this process multiple times. Therefore, a property originally intended for sale in January 2007 may not sell until July 2008, with multiple new listing times….and a market time of 37 days, according to the old measure.
Frankly, it’s been a misleading statistic. (So much so, that I had planned on not reporting it at re:PDX anymore.)
Our MLS has long had a Cumulative Days on Market (CDOM) measure, which accounted for relistings and changes of brokers, etc., but for some reason did not become the standard measure for the real time on market. On my other micro real estate blogs, PropertyBlotter and move2westlinn, my co-authors and I began publishing the CDOM stats for all properties sold each week. Very eye-opening stuff.
So, for the August 2008 results, the RMLS board has decided to adopt a ‘Total Market Time’ metric and provide a more accurate picture to consumers. Here’s how it’s measured:
Total Market Time is an average of the cumulative number of days from when a property is listed to when an offer is accepted. If a property is taken off-market and re-listed within 31 days, Total Market Time continues to accrue; however, it does not include the time that it was off the market.
So, expect the Market Time numbers to jump upon publication of the next report around the 15th. I haven’t determined what measures other MLS boards use to determine market time and whether or not it will change how Portland is viewed vs. other national markets. (Perhaps some out-of-state brokers will comment?)
Any guesses as to what the Total Market Time numbers will be? Leave a comment.
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Related posts:
- Portland Real Estate Market Results - August 2008 Final
- Portland Real Estate Market Results - September 2008 Final
- Portland Real Estate Market Results - October 2008 Final
Entry Filed under: Forecasts, Market Activity, National News
4 Comments Add your own
1. JP | September 12th, 2008 at 6:41 am
It should be clear that the old days on market, as well as the new days on market, is bounded from below at zero. In other words there is no way to have negative days on market.
While the old days on market is not theoretically bounded from above, neither is the new system. In other words, no matter how large of a time on market I pick, all sellers could stick with a single listing (the old measure) for longer. The new system is no different, in that there is no theoretical upper bound. This by no means says that there is not a practical upper bound. For example we all finite life spans, and the expected value of the remaining life span must be considered. From an investment management perspective, one might take a life cycle approach.
In any event, under the old system I had suggested that a practical upper bound to the DOM was about 90. Yes, some listings last longer than 90 days, but some homes sell in the first day. Also when a seller switched agents, the clock reset. What’s a practical time for a person to switch agents (again, there really is no upper limit here, but there are practical realities)? For the last eight months the DOM has been above 70. Using my 90 days as a practical maximum, this suggested that the DOM was near maximum.
In the interest of transparency, I would like to see one of two things:
1. The old system continued for 12 months.
2. Using the new system restate the DOM back for at least 12 months.
2. JP | September 12th, 2008 at 6:44 am
Any guesses as to what the Total Market Time numbers will be?
183.
3. Portland Oregon Real Esta&hellip | September 15th, 2008 at 12:48 pm
[...] really, does it take to sell a house in the Portland area? The answer: 121 days, according to the new Total Market Time measure* released this [...]
4. dui | September 26th, 2008 at 9:29 am
Of course it’s silly trying to call the bottom, but I think the housing market is still headed headed for deeper waters. I don’t think we’ve had capitulation yet and people are not jumping off the third story yet.
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