The Pasadena home price boomerang

There's a better explanation: Many houses listed right now are "short sales." Often, the house will get initially listed at a price the bank won't accept, but at a price that will attract buyers. Offers come in, and if the bank doesn't accept them, the home will then get re-listed at a higher price that they owners believe will be accepted. For instance, I know of a house that was listed for $499K, way way below market value. The house was about to be put on auction. A month or so goes by, and the next thing you know, the house is re-listed at $575K. The bank obviously wasn't accepting offers coming out of the original asking price.

I am a real estate agent in the Pasadena area. Our local MLS (Pasadena Foothill Association of Realtors - PFAR) has implemented a new feature that shows exactly how long a house has been on the market to ensure that manipulation of this sort does not occur. Anytime, we pull up information on any home listing, we can see a CDOM (Cummulative Days On the Market) statistic which tells us immediately whether or not the home is a new listing or an existing updated listing. We have seen this manipulation of prices in the past, but not recently. Also, PFAR rules require that any home price changes are approved by the seller/owner with a signed amendment to the listing contract which detracts from agent manipulation due to heavy violation fees levied on the real estate agent trying to game the market. I agree with Eric, most likely what we are seeing is due to the new short sale phenomenon as agents are trying to understand how individual banks are handling and approving these sales.

The specific examples that were cited were not short sales. These were properties that were actively "for sale" with no status (pending, back up) change. If a property is being marketed as a "short sale", it should be disclosed as such.

A couple of more points to Ms. Netchaev's comments. She is correct stating that adjustments were made to the MLS. These changes prohibit an agent from cancelling a listing and then re-listing it. Previously this allowed an agent's property to show "new" again after being listed for several days. However, an agent is free to change a price without the Boards (PFAR) approval. At least I can as a Broker. Also, when a consumer is using the public features to search for homes they do not have access to pricing history nor does their information present the number of days a property has been listed for sale.

As to Pasadena Homes' comment that consumers "do not have access to pricing history," I disagree. Redfin gives it to you if it's a currently listed property. I love it when you see a house listed back in March '08, and then see that every month they've reduced the asking price by $20K.