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A Few Essentials For Learning Your Local Real Estate Market.

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

August 31, 2010 12:38 AM

Hi folks. About a month ago I did an interview with Tim and Julie Harris of the Harris Real Estate University. One of the listeners posed a question that has been on my mind ever since. The question was "How do you learn your market?". It caught me a little off gaurd. Not that I don't know the answer but that someone in our business had to ask the question.

Knowing our market is what our job is all about.

Knowing our market is why buyers and sellers need us.

Knowing our market is what gives us confidence in our business.

Knowing our market is how we know where and who to market to.

Knowing our market is how we plan for the future.

Knowing our market is so important that if we don't know it we will surely fail. It's just a matter of time.

But having said all of that......"How do you learn your market?" is a very good question and one that I'm going to try and answer. To begin with, knowing your market means being able to answer the following questions if asked. There are many more but these will get you started:

How many properties are for sale in your market today?
What's the average price?
What's the average days on market (DOM)?
What's the median price?
How many properties sold last month? Last 6 months? Last year?
How many properties are currently under contract (pending)?
How many of the sold properties were Short Sales? Foreclosures (REOs)?
What's the "sold price to list price" ratio?
What's the absorption rate (Active listings divided by a month's average sales)?
Are values declining or increasing?
Is inventory declining or increasing?

These questions are asking for essential market information that buyers and sellers will want to know. The answers to all of them can be found in your MLS system. I check my MLS hotsheet every day first thing in the morning. I want to know what is going on in my market. Make this a DAILY activity. And while you are at it go ahead and solicit the expired and withdrawn listings. Kill two birds with one stone. This one little daily exercise will give you market confidence AND you will also pick up listings. I've done this daily for 15 years.

By answering this next batch of questions you will become even more of an expert on your market. By knowing the answers to these you will be able to laser focus your marketing.

How many total properties are located within your market?
What's the average age of the folks that live there?
Who's buying property there? Are they relocation buyers? Move up buyers? First time home buyers?
What mortgage products are they using? FHA? USDA? VA? Conventional? Cash?
On average how often do folks move OUT of your market?
Where are they moving to?
Who are the largest employers?
What Real Estate Company does the most business? What agent? Listing side? Selling side?
What percentage of business do they have?
Who sells the most REOs? The most Short Sales?

Folks, you may have to dig a little deeper for the answers to these questions. Some can be found in your MLS. For others you may need to contact your Chamber of Commerce. Or you can check online at sites like ZipSkinny.com (just remember these sites will be far more accurate once the census is completed).

So that's it for now. Hopefully this post will get you started in the right direction. Let me know if you have any questions for me. Does this help?

***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

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Fran Gatti

RE/MAX Integrity - Medford, OR

Managing Principal Broker - RE/MAX Integrity

Bryant, I knew the answer to every one of your questions because I do a monthly market report and check my stats mid month in case I need to discuss updated stats. This is easy for me because I'm a stats kind of gal and I like to write. However, even if you don't like stats or like to write you should still know the trends for your market and you can only do that by studying them. As far as I know, I'm the only agent in my market who regularly blogs and does a monthly market report. Pretty crazy.

Aug 31, 2010 11:36 AM

Eric Michael

Remerica Integrity, Realtors®, Northville, MI - Livonia, MI

Metro Detroit Real Estate Professional 734.564.1519

Waaaiiiittt a minute! You mean we have to work? We can't just drive nice cars and vacation at will? *sarcasm, obviously* Great post BB. Being honest, I can't answer them all. Having a list to keep the questions front of mind will help though. Thank you.

Aug 31, 2010 12:26 PM

John Novak

Keller Williams Realty The Marketplace - Las Vegas, NV

Henderson, Las Vegas and Summerlin Real Estate

Bill said it best in #5. I've got a little work to do on the second group of questions, but this is exactly the kind of research that I gravitate to.

Aug 31, 2010 01:01 PM

Letitia Stevenson

BHHS Fox & Roach | www.DelawareValleyRE.com - Greenville, DE

Listing Agent DE/PA/MD, Digital Marketer & Coach

Bryant, Great Information... Great Questions!!! I regularly run reports using valuable tools (like AgentMetrics and other great resources) to drill down to a localized, neighborhood level of market data, if desired. Markets statistics... increases knowledge and adds to credibility with prospects and clients.

Aug 31, 2010 01:10 PM

Kate Elim

Dockside Realty - Spotsylvania, VA

Realtor 540-226-1964, Selling Homes & Land a

Hi Bryant...I would have to say that very, very of my buyers in the 15 years that I have been working the Lake Anna market have asked many questions from either set of questions. There are a number of other questions unique to this area that are most often asked and it is not things that any agent can pull off the computer. That is exactly why using local agents is important. Facts and figures are available to everyone that has access to the same MLS system.

Kate

Aug 31, 2010 01:34 PM

Gordon W. Miller

Green Mountain Real Estate - Burlington, VT

Great post. Thanks for sharing.

Aug 31, 2010 02:42 PM

Danny Batsalkin

Keller Williams Realty - Beverly Hills - Beverly Hills, CA

Los Angeles Real Estate | 310.432.5706

Great post! I'm using this for training my buyer's agents!

-- Danny

Aug 31, 2010 02:54 PM

Keith Sellers

Sellers Real Estate - Kalamazoo, MI

Greater Kalamazoo and Lakeshore

Sheesh, I'm blushing, and not because of Wanda the crossdresser or whoever that scary photo is of!

I'd have to say I'm coming up with less than 50% on that pop quiz for market knowledge. Though I do chase a number of BPOs and CMAs every week that give me great exposure on the market.

Folks that know the answers to those kinds of questions are proactive and successful in any market, and not reactionary, like the general public (who always seems to be a day late and dollar short).

Thanks for the great post - will revisit.

Aug 31, 2010 03:50 PM

Chris Olsen

Olsen Ziegler Realty - Cleveland, OH

Broker Owner Cleveland Ohio Real Estate

Hi Bryant -- I once had a real estate trainer who asked all the agents in this 60 person office what price range was selling the best, and most everyone got it wrong because they didn't know the data and their hunches were way off. Nuff said! :)

Aug 31, 2010 04:21 PM

Bernadine Hunter, SFR, ACRE

Keller Williams Greater Columbus Realty - Pickerington, OH

"Finding Solution to Your Real Estate Needs"

There is no excuse not to know the answer to the first set of questions, because they can be obtained from the MLS. The rest involves just a little bit of work and curiosity.

Aug 31, 2010 05:27 PM

Gayla Worrell

Windermere Real Estate/Everett, Inc. - Everett, WA

Real Estate Webworks

Thank you for this. I always question if I know "enough" when I talk to people about my market. While I usually have the right answers, I think arming myself with the answer to these questions will definitely help my confidence level.

Aug 31, 2010 06:57 PM

Christine Donovan

Donovan Blatt Realty - Costa Mesa, CA

Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Market reports are a great way to accomplish most of this and to keep up to date on what's going on in the market.

Aug 31, 2010 07:04 PM

"The Lovely Wife" The One And Only TLW.

President-Tutas Towne Realty, Inc. - Kissimmee, FL

Oh...

That was me Hun. I'm shhhing you until I'm done testing it. It's a surprise :)

TLW...ROAR!

Sep 01, 2010 08:28 AM

Emmary Simpson

Las Cruces Homes and Land - Las Cruces, NM

Serving Las Cruces, NM

As a new agent, I am bookmarking this to refer back to. Fantastic information! Thanks so much for taking the time to share!

Sep 01, 2010 10:14 AM

Debbie Konter-Danville/Avon IN

FC Tucker - Avon, IN

Avon Indiana Agent

Great Post. You guys are "spot on" - I'm a football mom who sits thru the practices with other parents. The other parents are always bending my ear about the local market. It keeps me on my toes. Thanks for the list of questions.

Sep 01, 2010 04:13 PM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Hi folks.

John Zappla #23 has the right approach. Set yourself up on auto property alerts. I do it for my buyers and sellers but haven't done it for my self but will now. Especially for new areas that I'm breaking into. Thanks for sharing that John

And Victor #39 BPOs. BPOs are an excellent way to glean market knmowledge and a great way to get paid!!

As I appreciate you stopping by. I wrote this article because I am breaking into a new market and I needed a reminder of the things I need to be doing. I love lists!!!

And Phil we already know who the best looking Broker in my market is. It's me!! And of course I have proof.

Sep 02, 2010 11:10 AM

Gail Robinson

William Raveis Real Estate - Southport, CT

CRS, GRI, e-PRO Fairfield County, CT

I honestly don't know how agents cover a wide geographic area. I specialize in one neighborhood in one municipality and that's takes nearly all my energy to stay on top of everything that's going on. I can walk to each of my listings and actually do walk by many of them when I go out for a walk. I love being the expert and even enjoy helping other agents to understand my market. If I had to stay on top of 10 market areas, I don't think this business would be pleasurable for me (and probably not very profitable).

Sep 02, 2010 06:11 PM

Tracy Santrock

Santrock Realty Group Inc. , - Cary, NC

Raleigh - Cary Broker

I studied and studied when I first started and now I feel comfortable with my local knowledge and it's helped my business too! Great collection of questions to see if we truly know our market.

Sep 05, 2010 10:59 AM

Susie Blackmon

Ocala, FL

Ocala, Horses, Western Wear, Horse Farms, Marketing

Knowing the market in detail will be more important as time goes on, since the public can get 'common' information now on their own. Terrific lists BB!

Sep 05, 2010 11:51 AM

Bill Saunders, Realtor®

Meyers Realty - Hot Springs, AR

www.BillSellsHotSprings.com

Hi BB,

another great post. Even though so much is automated for us, we still have to keep on top of it, because this is still a person to person business when it is all said and done.

all the best to you guys...

Sep 06, 2010 03:23 AM