Good news for home sellers, in most US regions. Tuesday’s news release from S&P/Case-Shiller Home Price Indices indicates a nationwide home price gain. The 10-city and 20-city composites continue to show home price gains, as the composites realized a 4.7 percent and 5.0 percent year over year gain respectively (month over month gains were 0.8 percent and 0.9 percent respectively). The Washington, D.C., region was not as robust as the others in the composts, however, as home prices gained about 1 percent year over year and about 0.8 percent month over month (us.spindices.com).
The S&P/Case-Shiller index seems to be in agreement with the U.S. House Price Index Report issued by the Federal Housing Finance Agency (fhfa.gov), which indicated that national home prices gained 1.3 percent during the first quarter of 2015. Maryland home prices, however, did not fare as well with a 0.38 percent decline year over year.
Hot markets in western regions of the US, such as Washington, are making news besides strong home prices. In one of the hottest markets in the nation, a Seattle Washington broker has decided to drop out of their MLS. Counter intuitive to the idea of maximizing listing exposure, Rob Smith of the Puget Sound Business Journal reported that Quill Realty is dropping out of their local MLS (Here's why this Seattle realty company just ditched the MLS; bizjournals.com, May 18, 2015).
Instead of MLS placement, Quill intends to place listings on a number of websites, including Zillow, Redfin, and Realtor.com. The rationale is that sellers will save money from the 1 percent commission that is charged by Quill; while buyers of Quill’s listings “… will become responsible for working out a financial arrangement with their own broker.”
Of course, this is not an entirely new idea. There have been a number of seller oriented business models that have been devised over the years; with new variations popping up during hot markets. Many discount brokers and MLS placement services, which have survived the housing downturn, have continued to market their business model successfully.
Innovative or not, hot markets tend to make brokers become more protective of their listings by seeking ways to keep them proprietary. Low housing inventory in some markets, along with increasing home prices and buyer competition can make a home listing a hot commodity. I will remind of the recent report indicating that pocket listings were on the rise. Pocket listings are listings kept out of the MLS and shown only to a select network of contacts and clients. And although pocket listings are often associated with luxury real estate, pocket listings in hot markets can occur across all price ranges because of the increased home buyer competition.
In response to recent trends, several regional Realtor groups and brokers have been formulating a nationwide consumer MLS to provide the consumer with up to date relevant information (brokerpublicportal.com). Board member of the Broker Public Portal, Robert Moline (Home Services America) stated, “There is a tremendous amount of support and momentum throughout the MLS and brokerage communities to create a new choice for how and where to display their listings…”
And even though many home sellers are taking advantage of a seller’s market in their respective markets, home buyers are becoming increasingly resourceful as well. Many buyers are learning how to find home for sale in places other the MLS. Besides alternative listing websites, many buyers are also relying on neighborhood listservs (email lists) and internet groups for home sale notifications.
Dan Krell is a Realtor with RE/MAX All Pro in Rockville. You can access more information at www.DanKrell.com.