Knowing Your Real Estate Market Is Crucial For Success.

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

tutas towne realty

Hi folks. I did an interview and 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:

  1. How many properties are for sale in your market today?
  2. What's the average price?
  3. What's the average days on market (DOM)?
  4. What's the median price?
  5. How many properties sold last month? Last 6 months? Last year?
  6. How many properties are currently under contract (pending)?
  7. How many of the sold properties were Short Sales? Foreclosures (REOs)?
  8. What's the "sold price to list price" ratio?
  9. What's the absorption rate (Active listings divided by a month's average sales)?
  10. Are values declining or increasing?
  11. 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 And while you are at it go ahead and solicit the expired and withdrawn listings.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.

  1. How many total properties are located within your market?
  2. What's the average age of the folks that live there?
  3. Who's buying property there? Are they relocation buyers? Move up buyers? First time home buyers?
  4. What mortgage products are they using? FHA? USDA? VA? Conventional? Cash?
  5. On average how often do folks move OUT of your market?
  6. Where are they moving to?
  7. Who are the largest employers?
  8. What Real Estate Company does the most business? What agent? Listing side? Selling side?
  9. What percentage of business do they have?
  10. 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?

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

The BIO for Bryant Tutas

 

 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Comments (31)

Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

What a useful tool your blog will be for new agents-- all excellent questions for helping newbies identify a market. Well done.

Jul 20, 2013 09:33 AM
Mitch Muller - Charlotte NC Real Estate
ProStead Realty Charlotte, NC CRS SRES mitch@prostead.com - Charlotte, NC
Certified Residential Specialist

Bryant, this is an EXCELLENT post and one that I am going to work on right away! I know my market pretty darn good I think, but I still have a lot of room for improvement after reading your post, THANK YOU!

Jul 20, 2013 10:14 AM
Kim & Kristine Halverson
Compass - Santa Monica, CA
Sisters, Realtors

Really solid basics!  Love it.  Kristine :)

Jul 20, 2013 11:14 AM
Lynda White
Bluegrass Homes & Farms Realty, Agent Know How - Louisville, KY
Admin. Mgr., Keller Williams Realty

#14 and #15, a double shot of spam! LOL

Thank you, thank you Bryant, so much! I just posted this question on Facebook this afternoon to my agent list: "To be a 'specialist' in a certain city (not neighborhood), what types of information do people expect you to know?" 

I am becoming a buyer's agent very soon, and while I did receive a few replies, your list is very solid and some of those things were not mentioned. This will be very helpful to get started. I should have known Active Rain was the place to come.

Jul 20, 2013 12:13 PM
Kelly Taylor
Keller Williams - Lakewood Ranch, FL

Great post!

Jul 20, 2013 12:17 PM
Rosie Moore
Serving Sugar Land, Richmond, Rosenberg, Missouri City - Sugar Land, TX

This is an excellent post.  Besides sales data, a knowledgeable realtor needs to know everything they can about the neighborhoods including the price ranges, property tax rate, school zones, HOA fees, and amenities.  You want to be the neighborhood expert - and that is what buyers and sellers are looking for when interviewing agents.

Jul 20, 2013 12:21 PM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Byrant this is the type of  information consumer seek, and we should have the answers if we want to be known as market experts.

Jul 20, 2013 01:58 PM
Lisa Friedman
Great American Dream Realty - Essex, VT
30 Years of Real Estate Experience!

Bryant, this is an EXCELLENT post! Very well thought out and a lot of attention to detail.

Jul 20, 2013 03:02 PM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

A great post and very insightful, especially for those who maybe unsure of their real estate market or areas'demographics.

Jul 20, 2013 08:58 PM
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

I know the answers to all those questions except for the age of the buyers. I'm asked in public a lot how the market is doing and I can tell them. Knowing the market is part of our business. Great post Bryant!

Jul 20, 2013 09:20 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
Bryant. Thank you for the inspiration. I look up the Mls daily so that I know about new listings and pending sales.
Jul 20, 2013 09:42 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

To hold an intelligent conversation about an important subject as buying or selling is expected...good post

Jul 20, 2013 11:56 PM
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

And you know, BB, how disappointing it can be when you have all of that information on the top of your brain and the client doesn't give a rat's about it. They pick you because you were standing in front of them or because you answered the phone. I think we'd like to believe our clients are a lot more discerning than they actually are.

Jul 21, 2013 12:35 AM
Chris Miller Nevada Land with Water Rights
Vegas Grand Realty and Property Management - Mesquite, NV
Land with Water Rights For Sale

In my opinion this is the most valuable service we provide. Honest assessment of the market, a good CMA before they make an offer, should they rent a while or buy now, is it the right time to list based on their needs and the market. All questions most consumers can not answer. We as an industry often tend to just cheerlead the market, when at times we should be offering a more cautious approach.

Jul 21, 2013 01:28 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I've always said the most important things we bring to the table is our knowledge of the marketplace and out negotiating skills. I see too many agents who behave as if they are basically door-openers. Nothing substitutes for true preparation and knowledge and the ability to impart that knowledge in a way people find easily understandable to make important decisions.

Jul 21, 2013 02:31 AM
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Bryant-there is no substitute for market knowledge, for sure. And market knowledge can't be faked.  Your questions are important to understanding what I'd call MACRO market knowledge-you can learn them from behind your desk.  Market knowledge also means MICRO knowledge which means the agent knows what the neighborhood and the homes look and sound like.  The agent with market knowledge has been in those neighborhoods either previewing, showing or listing homes on that street or streets in the same tract.  It's deeper than the market stats or what can be learned from behind your desk.  

Jul 21, 2013 03:22 AM
Raymond Denton
Homesmart / Evergreen Realty - Laguna Beach, CA
Laguna Beach Realtor

That's very good stuff, Bryant ... very helpful.  I wonder how many follow it though?  95% of the local Real Estate websites in my area say the Real Estate Agent specializes in every city in South Orange County.  Rarely do I see one that says they actually specialize in a single city.

Jul 21, 2013 05:24 AM
Dee Toohey
Innovative Realty Solutions Group - Longwood, FL
Broker, ABR, AHWD, CIPS, FMS, ePro

So true. Our Board puts out weekly stats and it's the first thing I check Monday morning!  Keep up the good work.

Jul 21, 2013 05:37 AM
Lillie Painia, ABR, NHC, TAHS
Lillie L. Painia, Tri-R Realty Group - Missouri City, TX

Bryant,

What a great post, thanks for sharing!

Jul 22, 2013 06:18 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Hi guys. Thanks for stopping by. I hope this article helps someone in their business.

Jul 22, 2013 11:31 PM