Everything is getting multiple offers, right? Many sellers feel that way, but it’s just not true. Today let’s dive deeply into what is actually happening with multiple offers. I’m excited about this and I hope you like it too.
Non-locals: If you’re not local, would understanding more about multiple offers help you? Could you ask your MLS about including a “multiple offers” field? This is how I’ve been able to extract data like this for my market.
FIVE THINGS ABOUT MULTIPLE OFFERS
1) A rhythm of multiple offers: There is a rhythm to seeing multiple offers in the Sacramento region. There are more multiple offers in the spring and less as summer and fall unfold. This isn’t a huge surprise, but it’s cool to see on paper. If you wanted to know, 42% of sales last month had more than one offer (which is what I mean by “multiple offers”).
2) The market isn’t always hot: It’s tempting to talk about real estate like it’s always “hot”, but it’s not. Every year the market heats up and cools as you can see in the images below. But on top of a normal seasonal up and down dynamic we’re seeing price growth slow too. In other words, prices just haven’t been rising as fast as they used to. When it comes to multiple offers, we’re seeing fewer these days compared to the past couple years. This is such a good point for sellers to understand. The market isn’t what it used to be. It’s still very competitive if you’re priced right, but it’s not like it was in the heyday of 2013.
3) Sellers, you might just get one offer: It’s easy to think everything is getting multiple offers, but it’s not true. When looking at thousands of current pendings, 59% of homes have only one offer while 20% have two offers. Thus 79% of properties in contract right now have two offers or fewer. My advice? Price realistically for today and you might get a couple offers. But you might only get one. Oh, and if you overprice you likely won’t get any offers at all.
4) It’s more aggressive at lower prices: This won’t come as a shock, but we’re seeing more multiple offers at lower price points. Here’s a look at multiple offers among current pendings as well as recent sales. Keep in mind there aren’t many sales and pendings above $700,000, so I wouldn’t put too much weight on these categories showing a higher percentage.
5) Many layers to the onion: Looking at multiple offers is just one way to see what the market is doing. The truth is there are many layers of the onion when it comes to real estate data, which is why I advise looking to many different metrics to understand the market. In other words, it’s not just about multiple offers to me (but this is cool to see).
QUESTIONS:
How did I get this data? A few years ago our MLS started including fields for “multiple offers” and “number of offers”. I’ve been watching these metrics and reporting on them for the past year or so, but today I’ve taken it to the next level.
Is this data reliable? I’ve had a few people question whether this data is reliable. Of course data is only good as the input by real estate agents and hopefully the truth is being told. Do some people fudge the numbers? Probably. But keep in mind we’re looking at thousands of sales and pendings, so a few outliers won’t sway the trend. Moreover, the bulk of pendings actually show just one offer, which helps support the notion of agent honesty.
I hope this was interesting or helpful.
RECESSION PRESENTATION: I keep getting asked about home prices and a looming recession, so I put together a quick presentation to download.
BEER & HOUSING CONVERSATION: Do you want to hang out at Yolo Brewing? On Saturday October 5th from 2-5pm I’m co-hosting a get-together. Hope to see you there. Details here.
Questions: What stands out to you most about the images above? What are you seeing with multiple offers these days? I’d love to hear your take.
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Good analysis Ryan. Are you including any multiple offer data in your appraisals? I’ve toyed with it but haven’t put anything together yet.
I’d like to join you Saturday at the gathering but my wife hasn’t seen me much the last two weeks. Next time.
Thanks so much Joe. I completely understand about Saturday. Good call on hanging with your wife. If something changes, I still owe you a beer for that Thomas Guide… I talk briefly about multiple offers in my market description within appraisal reports, but nothing exhaustive. I tend to focus on bigger things. This is definitely worth knowing. I just probably wouldn’t talk about it in depth in a report.
I’ve considered tracking multiple offers as a market heat check and year over year percentage change looks like the right metric. I’ll send you a copy if I move forward with it.
For folks who do not have this data, it’s a useful data point when reviewing competitive comp sales. Low days on market and multiple offers is really useful to know when trying to understand a specific transaction.
Right on Joe. That would be a good check. I’m anxious to see these next few years so we have more information to digest. This is a brand new metric really. For reference, this was instituted in 2016, but data appears a bit wonky at first. That’s why I didn’t really include much of 2016 above. I’d say data starts to get a lot more solid at the end of 2016 / beginning of 2017. I don’t know if MLS made it a required field then, but stats became more reliable then from my vantage point.
I share your sentiment too. I think it’s great for appraisers to understand what is happening with the comps. How many offers were there? It’s pretty cool to be able to see and/or search in MLS.
It is cool that you can track multiple offers in the MLS. I would love to be able to do that in our market. RMLS are you listening?
Right on Gary. I hope they are listening. I think this is something agents can get behind too because it helps show the temperature of the market to buyers and sellers and it can be really useful for appraisers. I think when this first started I wasn’t thinking about exporting data like this, but now that we’ve had a few years I’m finding it to be so useful.
Nice post Ryan! It is interesting to watch the seasonal cycles and see the number of bids fluctuate. My MLS is great, but it does not provide this info yet, at least that I am aware of. It’s a great metric to watch. Thanks for your great analytical work as always!
Thanks Jamie. I appreciate it. I find stats like this are not revolutionary in the sense they pretty much tell us what we’d expect. But it’s so good to see the trend and have a few extra nuggets to be able to communicate about market trends. I’m fascinated!!
Ryan, Is it possible to provide a screen shot or how your MLS shows the multiple offers?
Hi Lynette. Sure thing. Here’s a link. Let me know if you have any questions. Just a heads-up though that the multiple offers field has an option for “yes” or “no”. I figured someone might ask. https://sacramentoappraisalblog.com/multiple-offers-screenshot.JPG
Also, in case anyone asks, here is the Sacramento MLS. It’s a Rapattoni system.
Subscriber link:
https://prospector.metrolist.net/
Public link:
https://www.metrolistmls.com/
The database for Metrolist captures the number of offers that the listing agent enters if the flag field is set to Y. That shows up in our views and reports and was what Ryan used to build the charts above.
Yep. I’ve found it to be pretty consistent too when searching “multiple offers” or “2 to 99” offers. In other words, we get about the same result with both searches. So I know “multiple” in the system does account for two or more offers.
As a side note, there is one property with 25 offers right now. It’s the highest amount of offers in the region. This is a total outlier and it’s really uncommon for that many. I’ve found when there are that many, there’s usually a reason (and it’s often because the home was underpriced).
Good blog as always. It’s very helpful to see the data in charts and graphs!
Thanks so much Steve.