All-time one-day record for homes Under Agreement throughout Massachusetts
Tuesday, May 21st, 2013 saw an all-time record for the number of homes going Under AGreement (UAG). In Marblehead alone the number almost doubled to 69 and the same pattern was duplicated throughout the State.
Does this mean that we should be wondering if Massachusetts is entering a housing bubble, as some were concerned in Los Angeles earlier this year? What is going on?
What is going on is that the Massachusetts MLS decided that, as of today, they would reclassify houses that had received an Accepted Offer (AO) but not progressed to having a signed P&S and changed to being UAG. Prior to today AO houses were still shown as being Active (available for sale). Starting today these houses are included in the UAG category. The result has been the huge jump in the number of UAGs.
A further change, at some indeterminate time in the future, will introduce a new category, Contingent, for houses where an AO has, yes, contingencies. There will be 6 situations in which the Contingent designation will be allowed.
Apparently, consumers were getting fed up because Zillow and Trulia and the like were showing houses as being available when there was already an AO.
OK I get that and I agree that the changes – WHEN COMPLETED – will make the position clearer. What I do not understand is the logic in making the changes in two stages: switching the AOs to UAG now and introducing the replacement, Contingent, at some time in the future.
All buyers have the option of working with a Realtor. In fact in a strong market any buyer who does not work with a Realtor is unlikely to hear of new houses coming on the market in a timely manner. Said Realtor already has access to this information in MLS.
So is the consumer really being harmed? Not obvious to me.
As I said I agree that the changes will improve transparency (the buzzword of the year) but why not wait until the replacement is ready? And why not introduce the changes at the end of a month or, even better, a quarter (June 30?). Numbers freak I may be, but not even I keep statistics as of the third Tuesday in May.
Another consequence of this decision, as pointed out to me by Matt Dolan at Harborside, is that the Days On Market calculation will now change. Hitherto, DOM started when the property was listed (duh!) and ended when it went UAG, not when an AO was received.
Here’s an example. A property is listed and receives an AO after 7 days. By the time a P&S is signed and it goes UAG 21 days have passed. In MLS stats DOM is 21. Until now. In the future it will be 7. But MLS has no plans to adjust past data. Again, an improvement, but in the short-term at least there is going to be some confusion.
My unrelenting goal is to help consumers be informed by interpreting MLS data and pointing out the significance of the numbers.
Once the anomalies work their way through the system there will, indeed, be greater transparency. In the meanwhile, keep reading my articles! Your reading time won’t increase, unlike my time in interpreting the new format.
“And now,” as the late Paul Harvey used to say, “you know the rest of the story.”