Via
James K Barath, CMPS - Serving Northwest Indiana (Benchmark Mortgage):
When ever I have an opportunity to speak with Realtors throughout Northwest Indiana about real estate market trends, there is always confusion about the value of their listings relative to the competition. The first evidence that is always presented is the comparative market analysis that if done correctly addresses the direct competition. This direct competition is generally based on the style of home, age of the home, square feet, amenities and of course location.
Is this the only competition that impacts the saleability of a home? Absolutely not!
Here is a chart of the existing inventory of all single family homes in my local market identified as Porter County Indiana. I have not broken down the numbers based on price point, amenities or location. It should be noted that the growth of inventory shown above is another competitive force in the value of a home. Housing inventory has recently trended downward, but not enough to overcome the surge from earlier in the year.
What do you think will happen when the shadow inventory steps out of the shadow and onto your MLS? How about all those for sale by owners, non-MLS listed homes and direct builder sales? Don't those still have to be accounted for in the overall evaluation of a home's potential market value.
Another form of competition that is overlooked on a more routine basis is called substitute or indirect competition. A good example of this would be apartments, shared housing and extended family living. This is especially important if you are working with first time home buyers as they are more alert to these alternative options.
As a Certified Mortgage Planner and a valued member of your real estate team, Whose House Are You Competing Against?
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Looking for more specific real estate and mortgage advice for Northwest Indiana and/or the greater Chicago land area please visit my Welcome Home NWI website at www.WelcomeHomeNWI.com.
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Jim - Thanks for the re-post. I know that there are Realtors who are aware of the non-MLS activity, but are they really leveraging their insight in a way that can benefit a buyer or a seller. Hope this has given you a fresh perspective on the competition in your market.