Industry News

7 ways to say: ‘How’s the market?’

Local real estate stats tell the story

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Every real estate agent is asked, again and again, to give an opinion on the market. And too often that answer is in the form of a one-word answer. That's a mistake. There is a better way to answer this question. In fact, there are seven better ways. These take your opinion, which most consumers will discount, out of the equation. It is best to calculate all of the following indicators and use your local market statistics. Ignore national averages because they are less reliable. Compare ratios over prior periods of time and calculate these ratios for different property types (single-family homes, condos, co-ops, new construction) and price points (high-end vs. starter homes). The suggested real estate market indicators: 1. House price to rent price (price-rent) ratio It's a simple ratio: house price divided by estimated annual rental cost. The average national ratio for the 20 years before the bubble burst was 15. During 2005-2007 it was over 20. You should compare the ...