Well at least we’re not back to 1989 levels – yet

150 Pecksland Road, listed at $6.250 million in May, 2007, was deleted today from our listings and has immediately reappeared at a new price of $4.789. Sellers do this because the Greenwich Multilist is so easily fooled – the listing now makes no mention of the original price or even hints that the house has been lingering. I don’t think I have a problem with this, actually – a stale listing date harms the seller and if a buyer is curious (and he should be) his or her agent can easily dig up the information. I just mention it so that you’re aware of the practice.

In any event, I looked up the sales data on this house and it sold for $1.880 million in 1989. Using the CPI calculator, that’s $3,106,420 in 2007 dollars, and we’re obviously not there yet. Of course, the place hasn’t sold yet, either, so the jury’s still out. And, although it didn’t help 7 Gisborne’s price, like it, this house was extensively renovated in 2006. That used to count for something.

6 Comments

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6 responses to “Well at least we’re not back to 1989 levels – yet

  1. W.

    Here is why this sort of thing is a problem.

    (1) It distorts market wide statistics such as days on the market and relationship between original asking price and final sale price. This harms both buyers and sellers by making it harder to gauge the market.

    (2) Not only does it disadvantage people who choose to go without agents, but it also disadvantages people who have less than competant or lazy agents who do not take the extra step to get the real data. As amazing as it seems, not every person is aware that the data is manipulated in this manner, so not everyone will ask for the true DOM/original list price.

    (3) The fact that practices like this are so widespread and apparatently tolerated while still being technically against the rules undermines the credibility and ethical standing of real estate agents in general, not to mention any other information they provide to the public.

    Not directing any of this at you personally, of course, but I find it amazing that after everything that has happened in the past couple of years that realtors are still so nonchalant about such blatant attempts to mislead the public.

    • christopherfountain

      W, I’m not sure how hard I care to defend the real estate industry but here’s at least a tepid response. The MLS is paid for and maintained by members of the service – that would be us realtors. So if the data isn’t all it should be for buyers who choose not to use our services, I’m not sure that’s an argument that will get much sympathy. As it is, realtors seem to give away their knowledge far more frequently than do members of my old profession, who charge by the tenth of an hour for their time.
      Incompetent agents? You bet, but again, using the lawyer analogy, there are a lot of people in jail or who are financially ruined because they chose the wrong lawyer. The state has continuing ed requirements (which are mostly a joke, I admit) but what else can it do? If you don’t like the lawyer analogy, may I ask how your portfolio’s doing these days? Stuff happens. I suggest you try to use the services of the best people you can find and hope for the best.

  2. Retired IB'er

    In the end, I think the Romans said it best… caveat emptor. Was true 2,000 years ago and looks like pretty good advice still.

    That having been said I fully support a policy of “death to all lying scum” wherever they may be found… halls of Congress, denizens of Wall Street, real estate open houses or the playing fields of GHS.

  3. W.

    Chris– those are fair points and the lawyer analogy makes sense for me on an individual level. But even accepting the fact that there are good and bad individuals in every profession, the promotion of misleading market stats by local and national organized groups of realtors is hard to accept.

    When I get a flier in the mail or read in the newspaper a statement from some realtor association that sales in Town X are at 95% of listing price and DOM are holding steady at 65 days or some other BS, it is pretty amazing to me.

    Imagine if NASD promoted the sale of securities in this way— would people accept it? Again, it is not an issue if you are informed enough to see through the BS (as most of your readers and clients no doubt are), but the same arguments can be made against the ’33 Act. Hard for me to understand how realtors aren’t voluntarily being more careful at this point about this stuff.

    • christopherfountain

      W, I rail against this crap all the time – why do you suppose I’m so popular with my peers? But don’t get me going on stock brokers – I hunted them for a living for 15 years or so!
      And yet, some of my best friends … : )

  4. SizeBuyer

    The one thing that strikes me about agents is that they too can be as emotional about their listing as the seller is and I just do not understand it. Although, buying a house is an emotional experience however, in the end it’s just business that’s all, nothing more nothing less.

    They are supposed to be the professionals that try to bring a deal together between to very emotional parties (buyer and seller) but I often find they get roped into the emotional nonsense (“we are not going to let them steal the house from us”). Steal what? If your offers are all low then that is where the market is be a professional and get the deal done. That’s your job.

    If you have a buyer and you have an offer hammer out a deal and move on don’t get crabby about not getting your unrealistic price. Your price is the highest lowest offer or the deal that has the highest probability of getting done.