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Drop in under contracts questioned

Highlights:

  • Metrolist showed a 21% drop in under contracts.
  • A Denver-Aurora MSA report showed a 7.1% gain.
  • Metrolist is looking into the situation.

When Metrolist reported earlier this month that under contract homes in February had dropped by 21 percent from February 2013, it caught some real estate experts by surprise.

Given the volume of demand and the low supply, they said it “didn’t feel like” such a big year-over-year drop.

Separately, and with little fanfare, Metrolist, on its Recolorado.com site, showed another report providing a snapshot of the Denver-Aurora metropolitan statistical area.

The Denver-Aurora MSA showed a 7.1 percent year-over-year increase in contracts.

Because the Denver-Aurora MSA and the Metrolist track different geographic areas,  some differences would be accepted. However,  statistically savvy real estate experts were shocked the two reports showed such different trends.  The report includes single family homes and townhomes.

While the contracts may have been the biggest differences, it was not the only one. Metrolist showed an 18 percent drop in sold homes, while the Denver-MSA report showed only a 5.9 percent drop. And while the Denver-MSA report showed a $253,500 median price of all homes sold last month, a 6.5 percent increase from February 2013, the Metrolist report put it at $274,00 an 8 percent increase. 

The gulf between the two reports, especially for the percentage changes for under contracts,  has not unnoticed by Metrolist.

“We have got a couple of people digging into this right now,” Kirby Slunaker, the CEO and president of Metrolist told InsideRealEstateNews.com late Monday afternoon.

“We are wrestling with this,” he added. “If we need to restate the numbers we will let you know.”

However, he emphasized that he doesn’t know if the under contract numbers or any other metrics will need to be restated.

And it’s not fair to compare the two reports and think they would show the same numbers, he said.

“You have to understand these are two different sets of reports that have different geographic areas,” he said.

Starting this year, Metrolist now includes all of its members listings statewide.

That is why the Metrolist report shows 7,610 active listing, while the Denver Aurora MSA report shows 5,493.

Perhaps more surprisingly, Metrolist showed fewer homes being placed under contract and being sold and closed in February than did the Denver-Aurora report. Metrolist reported 4,001 homes being placed under contract in Feburary, while the other report showed 4,532. Metrolist reported 2,645 closings, while the Denver-Aurora report showed 2,748.

The Denver-Aurora MSA report is done by 10-K Research and Marketing based in Minneapolis. 10-K is used by the National Association of Realtors and more than half of every Multiple Listing Services in the U.S., Slunaker said.

About a year ago, Metrolist announced it had dropped its own proprietary MLS system and signed an agreement with the CoreLogic Matrix system, which provides far more features to the more than 15,000 Metrolist members than the previous one. Some brokers wondered if that played a role in the wide gap between the two reports. That is not the case, Slunaker said.

“The new system is rock solid,” Slunaker said.

Still, it is critical to know that in January, Metrolist, the biggest MLS in Colorado, began tracking monthly data differently than it had for the past quarter of a century.

It now includes all listings statewide that are handled by Metrolist members.

For example, if a Metrolist broker is listing a home in Summit County, it will now appear in Metrolist’s data base, Slunaker said. The same would be true if a Metrolist member listed a home in Aspen or Vail, for example.

Slunaker said some members of the media have requested data on the seven-county metro area to get a better snapshot of what is happening in the core area.

That is not possible, although 10-K does release an analysis of each metro area county.  Metrolist, for its monthly report, used several sources, including 10-K, he said.

“We never reported on 11 counties,” Slunaker said.
“Historically, we reported on 11 counties and then 12 with Broomfield (when it became a county as well as a city). But even that is not accurate because we reported on half of Gilpin and half of Park counties. The old system just didn’t make any sense.”

Previously, there used to be many separate MLS areas, such as Jefferson County North and Jefferson County Central, for example.

“All of those separate MLS areas have gone away,” he said.

He said in the past, some listings may never have been counted.

“If a broker down here was listing a home in Summit County we would not report it because it was outside or our area,” he said.

But if the broker didn’t belong to the MLS in Summit County it wasn’t counted at all.

“It was totally off the radar screen,” he said.

While it may seem simple to track all contracts, sales, active listings and prices, it isn’t, he said.

“If there was a clear cut way to do it that everyone agrees with, life would be a lot simpler,” Slunaker said.

Still, Slunaker said the differences have gone almost unnoticed by the vast majority of the members of Metrolist.

“I’ve received almost no calls,” Slunaker said. “I would say the only ones who’ve noticed are what I call the ‘stat heads’ who really dig into the statistics as soon as they are released.”

Have a story idea or real estate tip? Contact John Rebchook at  JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.