Report
On MLS Study: Measuring the Benefits of an Open Marketplace
pp 1-15
Aug 2022
Abstract
Most homes are listed and sold on a multiple listing service (MLS), a cooperative database that helps real estate brokers and agents connect buyers and sellers and facilitate home sales transactions. In the Bright MLS footprint, which covers six states and the District of Columbia, there were over 330,000 home sales transactions through the MLS in 2021. More than 80% of all home sales in this region are listed and marketed on the MLS. For real estate professionals, the MLS helps their business be much more efficient. And there are also are significant benefits to the MLS for consumers.
Over the past few years, demand for housing has been very strong and homes have been selling quickly. Homes regularly sold for above the seller’s asking price, and buyers often waived inspections or other contingencies, or made an all-cash offer in order to be competitive. Given how quickly homes have been selling, it is logical to ask the question – What is the benefit of the cooperative MLS to buyers and sellers? This research demonstrates that even when we are in a market when it is “easy” to sell a home, the Bright MLS creates a more competitive market for housing, resulting in better offers and quicker transactions. The MLS provides a tangible benefit to buyers, as it ensures all prospective buyers have equal access to information on all homes available for sale. The MLS also benefits sellers, as it supports competition for their home and encourages the best possible offer. Bright MLS’ Chief Economist and data scientists, in partnership with associated university researchers, conducted a study of the impacts of the MLS in the Mid-Atlantic. This research builds on and enhances prior analysis conducted in 2021 on the advantages associated with selling a home on-MLS. Using a careful data filtering process and a rigorous empirical methodology to ensure comparable on- and off-MLS properties, and employing a multivariate statistical analysis, this research finds that homes sold on-MLS commanded a 13.0% higher price than those sold off- MLS over the period 2019 through the first quarter of 2022.
The study also analyzed office exclusives — transactions where the listing brokerage firm markets a home only to other agents within the same firm and which are a growing share of off-MLS listings. There may be reasons sellers request an office exclusive listing if they do not want their home marketed to a wide audience. However, office exclusives can create inequalities in the housing market by limiting access to subsets of prospective buyers. Furthermore, this research finds that homes promoted as an office exclusive take longer to sell and bring the seller a lower price than homes marketed through the MLS. The benefits associated with selling a home on the MLS are clear, even during the fast-paced market of the last two years. This research ultimately concludes that the open, clear, and competitive marketplace created by the MLS generates the best outcomes for consumers.
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Details
- Title
- On MLS Study
- Creators
- Kevin C Gillen - Drexel University, Lindy Institute for Urban InnovationKen Schneider - Bright MLS (United States, North Bethesda)Lisa Sturtevant - Bright MLS (United States, North Bethesda)
- Publication Details
- pp 1-15
- Publisher
- Bright MLS
- Number of pages
- 15
- Resource Type
- Report
- Language
- English
- Academic Unit
- Lindy Institute for Urban Innovation
- Other Identifier
- 991022200857704721