IF YOU DON'T KNOW YOUR NUMBERS, YOU SHOULDN'T BE SELLING HOMES!
What are the important numbers that you need to know in order to speak intelligently about your market? What numbers should you know? What is the story that the numbers are telling you, your sellers and your buyers? What is happening now and what is going to happen in the near future?
This document answers the following questions: How many homes are currently on the market? How many of them are new construction and how many are resale homes? What percentage of the active inventory is new construction? What percentage of the sold homes was new construction? How many homes sold last month? How many months of inventory is currently in-stock? Of all the homes that actually closed last month, how many of them were priced IN the market from day one?
Don't get overwhelmed! I will explain what the numbers are, explain my interpretation of what they mean and give you some ideas for how to apply this information to your real estate practice. Take a few minutes to study the following document.
The first two boxes are self explanatory. The third box is Inventory and Absorption Rate. Absorption Rate is #Actives divided by #Solds in the last 30 days. The last box takes a bit of explanation but it is very telling. Please see my earlier blog titled The Tool YOU Are Missing. This will introduce you to the concept of IN, OUT and CHASING the market. After you get back, check out the box on the botton of the update and we'll talk about it.
In Lacey, last month there were 32 Resale homes that sold. Of those homes, 22 either had to reduce their asking price in order to fetch an acceptable offer OR the offer that the seller accepted was 10% or more below the asking price. SO, of the 32 resale homes that sold in Lacey last month, only 10 were actually IN the market. The others had to CHASE buyers in order to receive an acceptable offer. WOW!
Here are a couple study questions for you: What percentage of homes on the market are currently priced IN the market? What does that tell you and your sellers about the behavior of the market? Are home prices going up or down right now? How many months worth of inventory signifies a Buyers Market? Anybody wanna go build some NEW homes in Tumwater?
IF you would like an editable version of this doc for your use just shoot me an email. kirkrau@kw.com
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