Not everyone is a numbers person. Some folks really don't like math or dealing with statistics or anything that involved numbers.
Other people are very focused on statistics and numerical information, and tend to be more analytical. They not only appreciate numbers, but demand them.
Allow me to suggest that as a buyer in the Carlsbad real estate market, you should know about the market statistics for the area(s) you are interested in, even if you do not consider yourself a numbers person. Being informed about the market in essential to making a good decision about your home purchase so you do not overpay, or make offers that simply will not go anywhere, unless that is your M.O. If so, this post is not likely to be useful.
We are all aware of the statistics and trends that get reported in the media, but perhaps you do not realize that, as a source of data about the housing market, the media is woefully inept. Reporting general trends on a county or a region says little or nothing about what is going on in the local market, which is where you should be concerned.
As a buyer, you are likely concerned about what's for sale AND how the market is doing. Here are a few related tips:
TIP #1: Don't pay a lot of attention to what the media is saying about the area you are interested in, other than, perhaps, to use those headlines as a starting point of discussion with a knowledgeable REALTOR who can provide the numbers for the area of interest. Their reports are too generalized and not often up to date.
TIP# 2: Get your statistics on the market from a REALTOR who can provide details from the MLS specific to your area(s) of interest, analyze the information and tell you what it means for you, and provide direction from other reports(e.g., Altos Research) and their own knowledge of the market. Your REALTOR should be able to provide statistics for you AND interpret them, plus answer your questions; if not, there could be a problem. Graphs can be helpful for those who are not so numbers oriented.
TIP #3: Be careful about relying on a single data point, or information for one month only. Trends, looking at statistics over time, will generally be more useful in giving you a feel for what the market in your particular area or neighborhood is doing. And the data should be specific to your market segment; the trends for the least expensive homes (under $200,000) CAN be very different that the most expensive homes ($1 million plus).
TIP #4: My personal belief is that the more information, the better. Statistics can vary from month to month depending on what homes have sold, particular the average price versus the median price. They also vary in terms of which stats you look at. People tend to have favorites, like the average price per square foot, the average price, median price, and so on, but relying on one can be a mistake since there are many factors that can impact these numbers.
TIP #5: Not only do you need to know statistics, like Days on Market (DOM), average and median prices, absorption rate/inventory, average sale price/list price ratio, number of home sold versus unsold, and more, but you should find out what these statistics mean for you, the buyer. What direction are the trends heading, and what are the implications?
TIP #6: Find out what is going on in the area with short sales, pre-foreclosures and REOs (bank owned properties). These may be the type of homes you are interested in, or perhaps the bulk of what is in your budget and market, and your should know what is selling, what is not, prices, and so on. And these should be factored into your thinking about an offer on the home you are interested in, even more so if that home is not a distress sale. These homes (if sold) can impact your appraisal in a negative way. They also may color your thinking about the area you are considering, so you should understand that this potentially means.
TIP #7: Data are important but they are not the end all/be all and you should not make a decision based solely on numbers. For the typical home buyer (not investors), statistics should be just a part of the picture, and you should evaluate ALL the information at your disposal before making an informed decision about your home purchase and the offer you wish to make.
As a savvy buyer, you will want to make decisions based on a wealth of information, statistical as well and more qualitative. Some buyers simply make offers based on whatever low figure they feel makes sense, but many times this simply leads nowhere. There is a fair amount of competition out there, especially for the distress homes, so ignoring the data will likely lead to disappointment. It IS your decision as to what you feel is a reasonable offer, but then there are always the consequences.
If you would like more customized information about the Carlsbad real estate market, or other communities nearby, please let me know. You can read the recent Carlsbad market report, with a link to prior reports, here.
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If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.
All content copyright © 2009 Jeff Dowler Carlsbad Homes and Real Estate Tidbits
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