Data Dump!

For the last 17 years, there has been an obsession to find a way to track real estate data in real-time. The same way stocks are tracked on the Dow Jones, NASDAQ, and S&P indexes.  When I was an independent contractor at my previous firm, I became frustrated with the market data that was being handed to me. At that time, the company I was with had the only legitimate market report in the business, which was created by Jonathan Miller. Jonathan was the only legitimate analyst in the city and was (and still is) rightfully well respected and revered. He had no side agenda other than creating the most comprehensive accurate data for agents to help us educate our clients on what the market was doing.  His reports were unbiased and completely objective. There was only one problem. Some of the data we were receiving was old. It was based on current and accurate inventory, but our transaction data was antiquated. We had no idea how many contracts were being signed and what prices they were being signed for. This information would have given us a true reflection on exactly where the market was and I wanted to give my clients real-time information. 

A lot has changed since then, but a lot hasn’t. 

When I started CORE in 2005, I decided to task my team with putting together the industry’s first real-time report. This would be the first report that tracked contract signed information. We called it The CORE Realtime Report, and it was sent out every month. Putting this report together was a herculean task and the first month the report was published it caused quite a ruckus in the industry. One of the leaders of the largest brokerage firms in the industry called me and berated me for disclosing too much information and giving away our “secret sauce”. A year later, she would copy our report and have her agents distribute the same data to their clients. Our report was generating a lot of press, and this didn’t sit too well with her. That year, Barbara Corcoran was quoted as saying that the future of our industry was with boutique agencies because technology had leveled the playing field. Everyone, regardless of size, had access to the same technology and information. Twenty years later, this is still a truism. 

The CORE Realtime Report was simple.  It disclosed how many contracts were signed in the last week and what the last asking price was before the contract. That’s it.  

We had a disclaimer on our report that it was at most only 90% accurate, but it gave us a snapshot of where things were. Over the next few years, StreetEasy revolutionized the way information in our industry was presented to the consumer and there was a race for technology in the individual firms. Everyone now seemed to embrace transparency, and we all had access to the same information. Things were looking up. 

But there’s only one problem - tracking transactions in real-time is impossible. 

A stock trade is easy to track. It’s a simple process. There is an asking price, then there is a bid price and then there is a strike price and the trade is made. Once the trade happens, it is memorialized and documented for everyone to see. (Apologies to all my friends in the financial services industry for oversimplifying this process). 

A real estate trade is impossible to track in real-time because of the way deals happen. First, a home has an asking price, then there is a negotiation between the buyer and the seller, then there is a meeting of the minds, then a contract is signed, and then there is a closing. Months later, the transaction is made public on ACRIS (the Automated City Register Information System which allows you to search property records and view document images for Manhattan, Queens, Bronx, and Brooklyn from 1966 to the present). ACRIS sometime takes months to post. 

Here’s a breakdown of the 6-part process in a real estate deal.   

1. A home is listed - public information - takes 1 day to 1 year
2. Buyer and Seller negotiate - private information - 24 hours to one month
3. ACCEPTED OFFER - STRIKE PRICE - private and confidential 
4. Contract Signed - confidential - 1 - 2 weeks
5. Closing - semi-private - 30 days to 3 years
6. ACRIS - a few months later

To determine the market in real-time, one would need to gather the information and compile the data for number 3 in this process. The accepted offer. This is the strike price. There is currently no mechanism in place to memorialize this, and I don’t expect there ever will be. No buyer, seller, attorneys, or their agents will disclose this confidential information. 

As I learned when I released The CORE Realtime Report almost 20 years ago, documenting how many contracts were signed in a particular week or month was fine, but not an accurate or true reflection of where the market was or what it was doing.  Jonathan Miller had it right.  

Today, every firm has its version of a report. Some document inventory, absorption, average asking price, closed sales prices, and some even track contract signing at a price point for a “moment in time”. None of these can accurately depict the moment in time of the true strike price.  For now, and I believe for the foreseeable future, clients will have to rely on the insight and real-time information that an active and experienced real estate agent brings to the table. After all, they are the ones who talk to each other by the water cooler, pound the pavement, and know exactly what is selling and where - before it is ever seen in a weekly, monthly, or annual report. 

I'd love to hear your thoughts on this and what other ways data reporting helps us or hurts us. 

Side Bar:

Sadio Mané is a Senegalese professional footballer who plays as a forward for the Bundesliga club, Bayern Munich, and the Senegal national team. He is considered to be one of the best players in the world and amongst the greatest African players of all time. He makes over $10M a year. Some fans were surprised when they saw him carrying a cracked iPhone 11. This was his response. “Why would I want 10 Ferraris, 20 diamond watches, and jet planes? I stopped, I worked in the fields, played barefoot, and I didn’t go to school. Now I can help people. I prefer to build schools and give poor people food or clothing. I have built schools and a stadium, and provide clothes, shoes, and food for people in extreme poverty. In addition, I give €70 per month to all people from a very poor Senegalese region to contribute to their family economy. I do not need to display luxury cars, luxury homes, chips, and even planes. I prefer that my people receive some of what life has given me”.  

Let’s do this! 

Shaun