5 Real Estate Market Statistics You Need to Know and How to Use Them-Part 1 of 3

By
Real Estate Sales Representative with Keller Williams Realty

You want to buy or sell a house or multi-unit property? Know the local real estate market statistics before you make a move.  Knowing the real estate market is a great way to

  1. Determine your price to Sell your Home or Sell your Property
  2. Determine your home improvements before you go on the Market
  3. Determine what price you should buy a home
  4. Determine what repairs you should negotiate for

So to get you started successfully, I am writing this 3 part series

    • Part One The 5 What Real Estate Market Statistics You should Know
    • Part Two: How to Price Your Home to Get Its Full Value and Equity
    • Part Three: Homebuyers How to Negotiate like a Pro

Yes, I know most people aren't crazy about math, but numbers can be informing. And you can be clear by knowing what numbers to look for and what they mean. For my target areas Contra Costa County and Alameda County in Northern California those numbers are kept by Title Companies, County Recorders, but the most comprehensive and accessible are kept on the Multiple Listing Service (MLS).

The MLS of the East Bay(tm)  keeps the following listing statuses:

·         Expired- Listings that have expired within the selected time period. Expired listings are those which were listed to sell but didn't.

·         Active-Listing that are currently being offered for sale

·         Pending- Listings that have gone under contract but have not yet closed within the selected time period.

·         Sold- Listings that have sold within the selected time period.

·         New- Listings that have been added to the MLS within the selected time period.

When gathering these numbers make sure the geographical area is as small as practical.  For example knowing the statistics of Contra Costa County will not help you price a home on Giant Road in Richmond. The area is too big to get a clear picture. You want to hone in like you would look for directions in Google Maps TM. Keep going to smaller and smaller areas until you can pinpoint your mark.  Even knowing the market statistics for Richmond won't get you to the price of the home on Giant Rd. The City of Richmond, CA is too big because Richmond statistics vary from neighborhood to neighborhood. 

 

Also pare down the type of building; the four-unit building real estate market is different from the single-family residence market.  Make sure you are comparing apples to apples.

 

Each of these categories has an average price.  What happens most is that Expired listings are on average higher priced than Sold listings. There are individual exceptions, but the rule is that Expired listings are on average higher in price than Sold listings. For more on that see next weeks blog.

 

 

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Rainer
104,911
Don Stern
Realty Executives South Louisiana - Baton Rouge, LA
Greater Baton Rouge Real Estate

CJ,

I've found very helpful to break down the statistics even further.  For example, here are some of the analyses that I've done for my market area:

  1. Unit sales (absorption rate) over time by price range, dwelling size, and $/sq.ft.
  2. Dollar sales by month for a five year period.
  3. Above stats New vs. Resale
  4. Days on Market
  5. New home sales price and unit sales by subdivision over time

The homebuilders in my area have been especially hungry for this information as they plan what inventory (price, size, etc.) to put on the ground and where to put it.

Sep 23, 2007 11:24 AM #1
Rainmaker
613,330
Sharon Simms
Coastal Properties Group International - Christie's International - Saint Petersburg, FL
St. Petersburg FL - CRS CIPS CLHMS RSPS

CJ, As Dan said, absorption rate is important - you may want to describe that as Odds That Your Property Will Sell This Month.

     It's certainly important to compare Giant Road to other properties on Giant Road, but they also need a broader picture - what other neighborhoods would a buyer for Giant Road be looking in?

     The same statistics you gather for your blog can also be used in a neighborhood newsletter - often people will keep those stats for years. I generally send them out quarterly (they can get more frequent updates on my website or my blog.)

     You're off to a good start. Keep blogging often and regularly, and your skills will develop accordingly.
 

Sep 23, 2007 12:00 PM #2
Rainer
46,187
Burland & Edmands Stirling
Coldwell Banker - Madison, CT

CJ,

 Looks like a good series with some excellent advice.  It will be helpful to both your customer base as well as you being viewed as an expert in the area.  Being armed with the next couple of layers of information as noted above is helpful when you get called in for that appointment.

I typically will have market data by each town, price range broken into $100k segments, noting Days on Market, Listing Price, Sales Price, Sales Price to List Price Ratio, average List Price, Average SqFt.  If you know how to download data from MLS put into an excel spreadsheet and do a pivot table, it only takes 10 min

Sep 23, 2007 12:52 PM #3
Rainer
13,851
Tony Casmirri
Prudential Fox & Roach Realtors - Newtown, PA
Very nice.  I amlooking forward to next week.
Sep 24, 2007 04:32 AM #4
Rainer
5,683
Rick Calkins
Davis Wilson, Broker - Redding, CA

Very well organized.  The only suggestion that I would make is that posts aimed for potential clients be a little shorter.  Many casual readers will just look at the size of the post, and if it seems too large, they will ignore it completely (even if it contains wonderfully organized information that they are looking for!).  But splitting it up will give people a sense of completion (and connection to you) every time they read a post.

That's my two-cents worth of advice!

Oct 02, 2007 03:12 AM #5
Rainer
27,826
David Bennett
Tarbell, Realtors - Yorba Linda, CA
Yorba Linda Real Estate
Very informative.  Thank you.
Oct 02, 2007 05:34 PM #6
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Rainer
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CJ Walton

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