In a shifting marketplace in particular, every media headline creates more uncertainty for people. As an advisor working with consumers who are selling or purchasing a home, a key way that you can serve the consumer is by providing context to the plethora of clickbait headlines that scroll across their devices.
You don’t need to be a data geek, but you can explain a few key things for people to understand.
It is important to note that predominately, the data in these published reports is a lagging indicator, it is not a real-time indicator. You can further explain that the data, for example for a report on closed sales, reflects a period from several weeks to several months prior. Explain that nuance in terms of timing and how much depends on the mechanics of your marketplace.
A transaction that came together in February, is not the same as one that came together in May. You must be able to explain the differences in the market dynamics at the time a contract is signed versus when the closing is recorded.
A few key data points that I track are:
- Total supply of active listings on the market
- Total number of pending sales
- Median Days on Market
- How many new listings have come to market (in the last month, weekly)
- Pending sales — How many in the last month, how many each week, at what price points, the highest signed contract and perhaps the lowest
- How many closings per month
- Total number of off-market properties (also monthly and weekly)
- Median Price
- Median Discount off listing Price
- Absorption Rate
- Market Pulse (The market pulse is the ratio of the pending sales to active listings)
While there are other variations and sub-metrics I like to keep tabs on, the ones above allow me to keep a top-level understanding of the market, and to intelligently advise buyers and sellers as we discuss their unique circumstances. This is vital as they decide what the next steps in their real estate journey will be.
Putting together this information will help you to back up your market insights and guide your clients.