Since I'm focusing on just my town in '08, I thought I'd look at the performance of my competitors using available MLS data.
After crunching the numbers for last year's activity, I can tell who the top five firms are in total sales, and I can also identify the top producers in terms of average price and volume. I can even map sales and other indicators for by firm over time.
Here are some what I learned:
- There were over 500 homes on the market last year
- 97 firms (182 offices) were active in my town (listing/selling homes)
- Of those firms, only 5 had any significant market (between 4-15% each)
- Together these 5 firms controlled 45% of the market
However, not being satisfied in just knowing this level of information, I wanted to know something about how efficient these firms are. I decided to look at what I'm calling the "failure rate", that is, the percent of listings that were not sold--either because the listing expired or was withdrawn. (I'm sure many readers will say that including those withdrawn is not necessarily a sign of failure and, therefore, shouldn't be included. But the way I think a withdrawn listing is evidence--except in rare circumstances--of failure--be it in properly setting expectations, communications, pricing, follow-through, etc.)
When I look at the failure rate (expireds/withdrawals divided by # of listings), I learned a few interesting things. For example, the biggest listers had relatively low failure rates (16-35%), but not the smallest. A couple of modest size players had failure rates below 10%.
On the other hand, a few of the big producers also had rates of failure of over 50%. And one firm w/lots of listings and an army of agents in the region earned a an 80% failure rate in my town!
As a group, however, the segment with the most troubling failure rates were those with 3-10 listings in the mostly minority Northern half of town. Most of these firms had rates of failure between 50%-100%. Yes, a few completed the year w/out a single sale or contract extension. Very disturbing!
I'm wondering what people here think about this type of analysis? Is it fair? Is it useful? Are there better ways to measure or success or failure, or to evaluate the performance of competitors?
And, are firms w/high rates of failure acceptable to an industry already held by many in low regard?
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