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Not-so-open houses

Buyers are having to look harder to learn how long a property has been on the market.

July 20, 2007

WALK INTO the mustard-and-Similac-stained office of any Realtor in Southern California and ask the following question: "The newspapers keep telling me the real estate market is dropping like a rotten pear. Foreclosures are up, lending is tight, and I've got a cousin who serves complimentary Rob Roys at his Sunday open houses and still can't draw a crowd. So why should I even be wasting my time considering these astronomical asking prices?" No matter how you phrase the question, you'll get the same answer: "Prices are stable, but houses are just staying on the market a little longer, so now's a good time to get in."

So it's spectacularly good or bad timing that Southern California Multiple Listing Service has decided to limit disclosure of days-on-the-market and cumulative-days-on-the-market data. Although this information will be removed from the "client reports" that agents provide to clients, you can still get it if you're a smart shopper and ask for it. But be skeptical. Even in a putative buyer's market, there's still plenty of flapdoodle out there. Exhibit A: the argument that making days-on-the-market data less readily available actually reduces confusion among home buyers.

That at least is the claim of SoCalMLS, which notes that days-on-the-market data may indicate that a place has been showing for a longer period than it really has -- because houses are sometimes taken off the market temporarily during holidays, while repairs are being made or while sellers take time to rethink. The obvious solution to this would seem to be to make the entire listing "history" that is available to agents transparent to prospective buyers. SoCalMLS says there are technical problems that make this difficult to do right now, and the organization -- which is part of the nationwide network of multiple listing services available to brokers and National Assn. of Realtors members -- is perfectly within its rights to make its data available in whatever way it chooses. But the move does raise some interesting issues.

First, this 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. Second, despite this hiccup, the real estate market is experiencing a rapid trend toward transparency, with ever-more data on listings, comparative closing prices and loan availability easily accessible on websites such as themls.com, realtor.com, cyberhomes.com and others. Third, it's a sign of how much the market has changed from a few years ago, when the buying frenzy made days-on-the-market a nonissue. 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.

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