 Remember this screen from "The Matrix"? With numbers and statistics flowing constantly in blogs and news reports, Real Estate sellers and buyers can often be confused at what is really important to know about a market in making Real Estate decisions. In my opinion, here are the most important figures for Sellers and Buyers:
- Average Selling Price - This is a figure based upon properties similar to yours within your geographic area, and is what really dictates the best "Market Price" for your property. Pricing higher will usually mean the property will not or will take much longer to sell. Pricing lower usually increases the chances of selling sooner.
- Average Days on the Market - This figure, again, is based upon properties similar to yours and gives the seller an indication of what kind of timeframe to expect to sell within. This is also effective to use in guaging the price. For example, if one sees that properties at $xxx,xxx are selling at an average of 190 days and the owner needs to move quicker than that . . . if it's an option, the best strategy is to list at a price lower the than the average. Also, if the property has been on the market (with normal and consistent marketing) longer than the current averages . . . pricing should be reviewed.
- Total Number of Properties for Sale - This will tell you how much competition you have and will definitley impact price and negotiation. In markets where there many properties for sale, sellers have less to bargain with and are often put into positions to be much more flexible with pricing when it comes to offers. Conversely, low inventories obviously give the seller "the upper hand" in negotiations later on.
- Total Number of Properties Sold - The best timeframe, I feel, to look at for this is about 6 months. Any longer is not the best indicator of the movement in that particular market. Some things to look at with this is when there are a high number of properties for sale and low sales is what is going on in your area (i.e. job loss, development changes, pricing too high, crime rates, etc.). Although, some you may not be able to impact, but the best strategy is to impact what you can.
- Sales to Listing Ratios - This ratio shows how many properties go up for sale for every one sold. For example, a ratio of 1:4 is high and indicates that over the course of the listing that the seller can expect more competition and should keep an eye on pricing and other factors in the area to remian competitive.
- Local Economic Indicators - These include such things as mortage rates, job rates, business growth, average incomes, etc. All can give a better picture of the attractiveness to an area from a buyers perspective.
For the most part, these are the most important statistics in my opinion. Obviously, many others can be helpful but are not usually major impacts on buying and selling decisions. Some are even creative and interesting but not very useful for the individual. For example, we do analyze markets to get an idea of how long a market's inventory of properties would take to sell but this really can at best be called a "guesstimate". The reason being is that the market would have to remain constant and never does. It is not like a manufacturer who can stop the flow of production if sales are down or increase when sales increase. This type of figure really goes back to pricing as an overall to have a better understanding of the overall market. For the graph-lovers out there, the following show an overview of the Palm Coast, FL market and some trends and comparisons. 
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