The Council of Multiple Listing Services (CMLS) is recommending that MLSs not change their days on market calculations as real estate markets deal with disruptions caused by the coronavirus pandemic.
CMLS’s membership base includes 220 MLSs representing 1.3 million subscribers nationwide. Due to the outbreak, many states have issued shelter-in-place orders that prohibit real estate agents from showing homes in person. Some MLSs, including CMLS members, disagree on whether to continue to let days on market accrue for active listings in order to maintain data accuracy or to pause days on market in order to calm seller fears of stigmatizing a listing.
In guidance issued March 27, CMLS recommended that days on market (DOM) for active listings should not be altered if the property is available to be sold and is being actively marketed.
“Real estate professionals and the people they serve need to know what is happening — and not happening — in the real estate market right now. The bedrock of information the MLS provides is how they get that knowledge,” the trade group said in a letter on its website.
“Things are changing fast. And despite the events underway, people will continue to need to buy and sell homes. The value of the MLS as a fair, secure and stabilizing force in the market has never been stronger.”
One of the main values of the MLS is to accurately track the market and if data points such as DOM start being changed, that devalues the data set both to brokers and consumers, CMLS CEO Denee Evans told Inman in a phone interview.
Pausing days on market “has broader implications to the market that we need to understand, think about, and avoid knee-jerk reactions,” Evans said. Long-term consequences could be impacts to mortgage markets and appraisals as well as erosion of consumer trust, she said.
“We have to have a true and accurate reflection of what the market did” during the pandemic and consumers and brokers need to have the “confidence that the data is what it is,” Evans said.
Not everyone agrees. After Inman published an article on MLSs disagreeing over DOM, Thomas Daley, managing director of luxury and associate broker at Keller Williams Capital Properties, got in touch and said regional MLSs should pause DOM.
“I think the MLSs are more concerned with their business model than they are with the Realtor and the current situation. Given our country’s unique situation this would be the single greatest way to level the playing field and continue to give sellers, buyers and Realtors an incentive to keep business moving until such time that the industry can reevaluate and adjust back to a new norm,” Daley wrote in an email.
“In my opinion, pausing or stopping DOM allows me control as a listing agent to do what is best for my client but also keeps my listing in the public domain while we as a country work through this. The rationale of the MLS that this somehow dilutes their data and we will look back at some moment in time in regret is a cover for how it will effect their business,” he added.
Daley said he thought pausing DOM was “a disruption or inconvenience for MLSs … [K]eeping things static is just easier for them but ultimately by not doing it I think they create more negative feelings about the MLS and lessen their value as a service provider because they create an unfair advantage for new listings versus listings that are being offered now.”
Evans disagreed. “It’s not whether it’s an inconvenience. It’s a matter of what is best in the interest of the marketplace: to have an accurate reflection of what happened so real estate professionals can understand what happened and even today to understand what the current environment is,” she said.
“Year over year, month over month, day by day, the data is important to accurately reflect what is happening. We’re not even sure what the impact of that would be if we were to make changes. [We need to know] how is this [outbreak] going to impact this and we’re only going to know if we continue to track it.”
She said she was very confident that real estate professionals can explain to consumers that days on market will be impacted for everyone right now. “It’s what they do,” she said.
“Changes to the consistency [of the data] is going to cause us more challenges in the long run with the consumer and the trust that they have in us as professionals,” she added.
Some Inman readers have questioned the importance of counting days on market at all. “How important is DOM in the big picture? We really could do without it altogether. This is actually the only product except for groceries that has a date on it. We don’t care how long anything else is on the market before deciding to buy it,” commented Douglas Echelberger of Pacific Sotheby’s International Realty.
Evans declined to comment on the benefit of the DOM metric. “Different people use it for different things. That would be a broker-specific question or an agent-specific question,” she said.
In its guidance, CMLS also urged MLSs to keep using existing listing statuses as defined by the Real Estate Standards Organization (RESO). The trade group is not referring to adjustments to status rules that some MLSs are making due to the pandemic — allowing listings to stay in “hold” or “coming soon” status for longer, for instance. Rather, CMLS is saying “don’t go create a COVID-19 status,” Evans said.
“Look at what you already have in there. Communicate to your members as to what the best status is to use for what you’re trying to accomplish,” she said.
CMLS also urged its members to use the situation as an opportunity to come up with ways to market a property safely, such as through virtual open houses and showings. Innovation that might have taken years might happen in a few months instead, Evans said.
“There are still wet signatures required in states. Does that really need to exist?” she said. “This is an opportunity as an industry to help evolve quickly. To follow local and [Centers for Disease Control] guidance, but create a more efficient marketplace and more efficient transactions.”
Moreover, MLSs can help local officials understand what the real estate market looks like and help them make informed decisions, according to Evans.
“The MLS facilitates market liquidity, and real estate needs to continue to work for our communities. In most markets, it is possible to operate both safely and lawfully while observing experts’ recommendations and government orders,” CMLS said.
“MLSs can work with local and state associations to provide current market data that informs local officials in an effort to classify real estate as an essential service. This does not mean business as usual; we must practice responsible real estate.”