A new study finds that pocket listings sell for more in North Texas. Local agents back up the results, but also point out local factors that could complicate comparisons to other markets.
Using North Texas Real Estate Information Services data from 2002 to 2022, an independent study conducted by University of Georgia professor Darren Hayunga found that homes sold as pocket listings, especially luxury homes, fetch a significantly higher price than similar homes listed publicly. That’s due in part to privacy preferences, but it can reflect an effective pricing strategy, according to the study and local agents. In addition, due to Texas’ non-disclosure laws and high local property taxes, agents say the homes captured in the data represent only a part of the Metroplex’s substantial private listing market.
Dallas/Fort Worth’s breadth, variety and ample supply made it possible to compare pocket sales with similar traditional sales in large numbers, Hayunga said. For an “apples-to-apples comparison,” Hayunga’s 20-year analysis matches pocket sales to public sales that took place within the same area during the same period.
“DFW has a collection of urban, suburban, ultra-luxury markets. It’s a deep competitive market. Also, it’s not supply-constrained; so, if you look at a city like New York, San Francisco, higher levels of zoning might make it a more unique market,” Hayunga said. “So I see DFW as a mainstream market that can be generalized.”
Hayunga measured a 1.7 percent price premium for “zero-day listings” — sales uploaded to the Multiple Listing Service with zero days on market — in North Texas sales data from 2002 to 2022. For luxury homes, the pocket listing premium is even higher, with homes at the top 1 percent of the market selling for about 8 percent more as pocket listings.
In other words, “we provide the first empirical evidence that the choice to limit exposure can be a rational value-maximizing strategy,” Hayunga says in the paper.
Despite claims that private sales put sellers at a disadvantage, some DFW agents agree that sellers use pocket listings to preserve their home values, not just their prestige.
According to Jerry Mooty Jr., CEO of Christie’s International Real Estate @properties Lone Star, luxury buyers tend to value privacy as highly as sellers do, and they’re often willing to pay more for privately marketed homes.
“High-net worth individuals are very sensitive to privacy, so you’re probably going to get a higher price because they don’t want the house to go to market and get into a bidding war or some other situation that may or may not benefit them as a buyer,” Mooty said.
In addition, “the cost of being on the market a long time can be quite high,” said Plano Compass agent Matt Haistings.
“When they hit the 30-, 45-, 60-day mark, the actual cost compared to their original asking [price] could be a huge delta between 5 [percent] and 10 percent,” Haistings said.
While Compass and other advocates of private listings have made similar arguments that apply to major markets around the country, Texas sellers have the added incentive of lowering their property tax bill. Because Texas is a non-disclosure state, county appraisers rely on public sales data to determine home value, making true off-market sales an attractive option for luxury homes, agents say.
“A lot of people, especially high-net worth individuals, may not want people to know the value that they put on their own house,” Mooty said.
While zero-day listings fall under private marketing, the North Texas Real Estate Information Services MLS requires agents to input a home’s asking price and price at sale when they upload a sale. But agents can also broker deals that avoid the MLS entirely and leave no record of a public asking price, resulting in significant property tax savings for multimillion-dollar homes.
That’s not the case in mandatory disclosure states, Haistings noted.
“Look at Los Angeles — that has lots of high price points, but it doesn’t matter. Everybody’s gonna know what it sold for,” Haistings said.
Because off-market sales never enter the MLS at all and are only recorded in deed records, Hayunga’s study doesn’t capture them.
Agents disagree about how much luxury inventory in North Texas transacts off-market, but some report that off-market deals make up a significant share of private sales. Four Dallas homes have sold above $20 million in totally off-market transactions in the last quarter alone, according to Chad Barrett, a member of the state’s top-producing real estate team.
“I suspect most people who are doing off-market sales are choosing to not bring it to the MLS,” Haistings said.
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