Defining the 'local' real estate marketShared listing data leads to some overlap in sales reported by Central Pa. trade associations
All real estate is local.
That's what the industry professionals say. And that's how real estate associations and their respective database subsidiaries market themselves.
Across the commonwealth, there are 48 local associations that monitor a specific county, or several. And there are 28 multiple listing services, or centralized databases that list real estate for sale from member brokers, according to the Pennsylvania Association of Realtors.
In those terms, real estate is generally local.
But the reality is that members of these associations — many of which have dwindled in size — have continued to expand their geographic reach to do business, which means listing homes in more than one MLS through reciprocity agreements or separate memberships.
"It increases the market for sellers," said Frank Christoffel III, executive vice president of the Lancaster County Association of Realtors.
However, it also leads to some duplication in sales reported from these more regional MLSs.
"(Geographic) confines don't apply to the MLS. It goes where it goes," said David Phillips, CEO of the PAR.
An MLS is an independent corporation not directly tied to the state trade association. It's also a for-profit business and can be a separate corporation of a nonprofit association, or both might be for-profit.
Some are broker-owned MLSs and are not tied to any association.
There are no statewide rules on how an MLS reports or how it chooses to parse its data. And the various associations, at least locally, say they have no way of policing whether a property listed as sold in their primary jurisdiction is also listed as sold in another MLS.
"In areas that border two or more MLSs, it's not uncommon for properties to be listed in multiple systems so they can be exposed to the largest possible audience of potential buyers," said Kim Shindle, media relations manager for the PAR. "When that happens, it's likely that the sale is also recorded in each MLS. It's easier and more accurate for each MLS to list its own listing and sold data without any deletions, simply for accuracy so nobody accuses them of changing the data to make it look better or worse than it is."
The sale figures reported by the associations still show the general trend of what is happening in the primary market, she said.
"Marketplaces are not black and white lines," Phillips said.
The glaring example of where home-sale reporting can get confusing, maybe a bit misleading, is in the Harrisburg area.
The Greater Harrisburg Association of Realtors reports complete monthly and quarterly data for three counties: Cumberland, Dauphin and Perry.
But its MLS subsidiary, the Central Penn Multi-List Inc., tracks listings from members all over the region. As a result, 20 to 30 percent of the total sales figure it produces — the one quoted in news releases — includes transactions from outside the three counties.
Some of those sales are likely reported again in the property's home jurisdiction.
"Because each MLS is its own entity, GHAR has absolutely no control of what, for example, RAYAC MLS or Keystone MLS set for rules," said Sherri Pursel, government affairs director. "And we can't tell a GHAR member what to do or not to do in another MLS."
The Central Penn MLS transitioned to association ownership in 2004. It was previously broker-owned. The aforementioned RAYAC MLS is owned by the Realtors Association of York and Adams Counties Inc., while the Keystone MLS Network Inc. is co-owned by the Lancaster County Association of Realtors and the Lebanon County Association of Realtors.
"Duplication is not necessarily a bad word in some respects," said Stephen Snell, RAYAC's executive officer. "Northern York feels closer to Harrisburg."
RAYAC, which formed in 1997 out of a merger between the York County Association of Realtors and the Hanover-Adams County Association of Realtors, also has market overlap with Lancaster County and Franklin County.
Snell said the association does track and could quantify properties outside of county lines. But for reporting purposes, it does not include outside property sales.
Lancaster and Lebanon operate in a similar manner.
Between 2000 and 2001, there was a serious effort by the four local associations to create a regional MLS.
"We were engaged, but we didn't exchange vows," Snell said.
Finding a common structure for the MLS and the customer service tied to it became an issue, he said.
From a technical and practical sense, it makes sense to have regional, state or national systems, Phillips said.
But market dynamics — cultural and political differences — make that much more difficult, officials said.
"We encourage it to create efficiencies for members," Phillips said. "When members demand it, we do it."
The general rule of thumb is 30 percent overlap in members or listings, he said.
"It's still a good idea," Christoffel said of a broader regional effort. "More and more of our members are stepping over county lines."
Even with the housing market in a state of continuous recovery, there is a belief that association membership is not going to return to former peak levels, he said. For the Lancaster association, that was about 1,500 members.
"We're trying to figure out a way to cope," he said.
Pride and cultural differences probably will never lead to association mergers in Central Pennsylvania, Christoffel said. Technological efficiencies are more likely, with some shared vendors already in place.
"There are technical fixes today that could allow MLS systems to talk with one another," Snell said.
An effort is currently underway at the Pennsylvania Association of Realtors to produce a statewide quarterly home-sales report, said CEO David Phillips.
That snapshot, which could launch by year's end, would solely aggregate Pennsylvania listings. Sales would be counted just once, he said.