Manhattan Distribution Hub Changeover -- Some Side Effects
A: I apologize for the lack of content lately as we are in the process of transitioning to a new development team that will facilitate the launch of our new site & ongoing improvements in the near future. Between site dev, the transition, and our buyer clients there are not enough hours in the day to write on UD. However, I think its important to quickly point out that there was a major switchover of the internal Manhattan broker sharing system from the Realplus controlled ROLEX engine to the now REBNY controlled RLS transmission engine last Wednesday. As with any major data transmission engine rollover, there are bound to be some temporary data discrepancies and we are seeing that now with UrbanDigs Active Supply trends -- to the tune of about +8% or so. I want to spend a few minutes to discuss.
For the longest time brokerage firms shared listing information and status updates via ROLEX, which stood for the Realplus Online Listing EXchange. Last Wednesday, REBNY took control of that distribution mechanism.
For a quick recap of the new REBNY RLS changeover, please see The Real Deal's "New REBNY listing system launched today" which stated:
The transition to the new RLS -- the electronic portal through which all REBNY members can view and share listings, enabling them to co-broke - has been years in the planning.Its impossible to predict exactly how 300+ brokerage firms with all their data and 9,000+ agents managing listings will perform with a major backend change like this. The transmission engine is basically a huge distribution hub that processes 1,000s of status updates a day throughout the entire brokerage industry so everyone sees the same data at the same time. Updates to this mechanism should help to improve data transmission quality, data completeness, data reliability, and data timeliness; as well as be scalable to plug in new apps/tools in the future.
The new system replaces an older transmission system maintained by RealPlus -- dubbed R.O.L.E.X. Developed by Katonah, N.Y.-based Stratus Data Systems, the new system conforms to a nationwide industry standard called the Real Estate Transaction Standard, or RETS. Brokers have awaited a RETS-compliant system for years, decrying the fact that New York City has been technologically behind every other metropolitan area in the nation.
"Having worked meticulously with each of the RLS vendors on the transition to the new engine for more than a year, participating RLS brokerage firms will now be able to take advantage of a powerful tool to improve their day-to-day business operations and help brokers better serve their clients," REBNY said in a statement to The Real Deal.
It doesnt change the fact that the data is maintained and edited by brokers ---> so in the end, its up to the brokerage community to step up to the plate and enter as much verified information they can for new listings & update the status of those listings as needed -- certainly update OLD listings that may be incorrectly set! The data will always only be as good as the broker that inputs & maintains it.
Now that this major backend change took place, we are all monitoring changes with our data sources.
On our end, on Saturday the 21st we saw about 480 new listings come in from firms that we previously didnt have a record for. As instructed we updated our vendor who is now looking into it. The simplest explanation is usually the correct one and in this case what we have are 100s of firms' databases being distributed via a new platform and we should expect the system to have a filtering & purging period, until all bits of information are fully processed. This should be a 1-time thing and it is a healthy thing; so expect the unexpected for another few weeks or so. From what I have seen most of those listings are older listings but a small % are listings that seem active but were somehow missed in the old feed. In the end, more data is a good thing.
Here is the ticker showing the jump in 7-day and 30-day ACTIVE trends:
And here is a 3 month chart showing Manhattan Supply, where the spike in supply just occurred following the changeover:
The UrbanDigs Manhattan tracking systems were engineered with a layer 1 flow algorithm, allowing the system to self correct over time. It's great to have more listing information for units that were on the market in the past for our new tools in development, but the temporary side effect is that we have to wait for those listings to filter through our system and out of current trends like Active Inventory. Right now, I would say supply is about 8% or so inflated.
Its great to see our systems so clearly show these discrepancies and such quick reaction by users of the UD tools. But in this case it is not a market phenomenon. Im even hearing brokers starting to complain that they are getting calls for listings that haven't been on the market for many months and years. So its something we should all understand and expect to continue, and adapt to in a month or so when the transition is fully stabilized. At that time we can review any and all discrepancies that occurred and remove poisonous data from our charts via a backward revision.