[iEatClams]

I follow this pretty good blog on RE, and there was an interesting posts today regarding re-listings and price drops:


Whispers from the Edge of the Rainforest

For those who follow the real estate bear blogs, it is a well known practice.

In an attempt to hide seller desperation, property listings are pulled and re-listed with a new MLS number. It helps hide the number of days a property has been on the market, not to mention some of the price drops a property has had. Because let's face it, when buyer's sell desperation, the lowballing intensifies.

Vancouver Observer noticed this practice over a year ago on his excellent site, Vancouver Price Drop. So prominent is the practice that Observer now tracks all old MLS listings for a property to give us a true insight into the selling history of a property.

In this weeks Vancouver West detached spotlight, the top property for price reductions is at 1010 West 57th:



1010 West 57th pulled it's listing on January 16th, 2013 and relisted with a new MLS number on January 25th, 2013. This move helps hide 291 days of market availability as well as $1,000,000 in price reductions.

This property, however, is a very minor example of the relisting phenomenon. Observer has made several interesting posts in the past charting relisting champions.

Interestingly realtor Arnold Shuchat also touched on this phenomenon in a post on his blog today charting this week's biggest price declines in Richmond.
Publishing these price reduction blogs on a regular basis is time consuming. But this week's Price Reduction report was even more so. I have observed that for almost every week that the price reductions are published, the average reduction is between 4-5% regardless of property type, give or take 1%. Under a hypothesis that those averages do not really tell the whole story, I conducted a search of every price reduction listing to review the price history from the time it was first listed. The results yield a completely different story as I suspected. I am not going to undertake this every week, but as an eye opener and to make a point of what's really going on I did it this week. The numbers speak for themselves and here is the summary:

The average price reduction since originally listed is 11% instead of the most recent 5%. But, if we take the top 10 price reductions since listed, the average is approximately 20%! And, the properties are not yet sold!
The real estate industry official line is that price reductions are minimal and that sellers are holding firm with their prices. The industry insists any price declines are only minimal.

But anyone conducting a proper, detailed analysis is uncovering quite a different story.

Surprised?