Five Things You Should be Tracking

By
Education & Training with The Lones Group, Inc.

The Lones Group, Inc.

Five Things You Should be Tracking

It doesn't matter what market I'm in, there are 5 things that are critical to track, and they have to do with things like the pace of the market, what the market is willing to pay, how the market has changed year-over-year, and most importantly what the relationship is between the buyers and sellers in that market.

New Listings

The first thing that I always track is inventory. When I want to track listings, I look at the pace that new listings come on the market each week. I will look at week-over-week, month-over-month, and year-over-year. The reason I do all that is because it will reveal trends in the area.

For example, if I go back three years and look at new listings week-over-week, it's easy to see that inventory has been on a steady decline. Then you have to ask the question, “Why?” In many areas, it's because of a lack of new construction. But what happens when you have something like Covid-19?

The reason it's more important than ever to track new listings is because you get to see what is going on with the mindset of sellers. Right now, there are three things going on: One, many sellers are just waiting, wondering what do to, and not taking a lot of action. This means fewer homes coming on the market. Two, we have builders that are not building, further reducing the listings coming onto the market. Three, you have those sellers that were getting ready to sell, convinced they could sell and buy up, but instead they decided to refinance and stay where they are.

The reason why I track new listings and why it's so important is because it gives you a really good understanding of what can happen in the market. If you have a sudden decline in listings, no matter where your pending numbers are, those pending numbers will be affected by that.

Median Sales Price

The next thing I look at is the median sale price, and I like to look at month-over-month as well as year-over-year. Again, the goal is to see what is happening with the median sales price trends.

If a market appears to be declining, but the house prices are not (as in the median sales prices are staying the same or going up), that is a clear indication that the market is having inventory challenges. A lack of supply drives the price up.

I've heard people say, wait a minute, the listings in this market are declining; that must mean the market isn't good. Regardless of the new listing and pending numbers, median sales price is critical to watch because if median prices keep going up, it's because of demand.

Time on the Market

How long are homes taking to sell? Is the average days-on-market number increasing or decreasing? You can find some really interesting trends here.

For example, during the Covid-19 pandemic, you would think those days-on-market numbers would go up. In fact, many markets and price points saw the days-on-market numbers go down because the demand was so strong!

Pending vs Active Listings

This relationship is going to tell us exactly what our supply and demand is. The closer those two numbers are to each other, the stronger the demand. The further apart, that means less demand. In many areas right now, in spite of the quarantine, unemployment rate, the economy rate, consumer concerns, we are seeing the pending numbers exceeding the listing numbers. That means the demand is so strong that it is driving prices up.

List Price vs Sale Price

This ratio is so important because it tells us how eager or willing the buyers are to pay above the asking price. It's really important to utilize those numbers to see the trends at work and understand the motivation of the buyers. If the buyers' motivation is high, they are going to pay a high asking price.

The most important thing right now is that your clients need to hear from you. They need to understand that it's not all gloom and doom. They need to understand that in their area, there could be fantastic opportunities for selling and buying. Every situation is different and each market is unique, but all clients appreciate good data.

It's critically important right now, more than ever before, for you to step up. Get into your MLS. Dive into the numbers. Know what the market is doing. Then convey that to your clients, because nothing is as powerful as the data we have right now.

Taking a good hard look at the data has helped me to show and educate my clients on how robust their market really is. I've had real estate agent clients tell me they're slow right now, but it might be that their business is slow, not necessarily that their market is slow. It is important for your mojo to see the difference between the two.

Bring the research to life by using a great example for your client. It could be as simple as letting a potential seller know why now could be a good time to put their home on the market. Show them the numbers. Show them that other sellers in their area are getting above list price for their homes. Use the data and ideas in each of these five categories to bring the market to life for your clients.

Until next week, please be safe out there, and we'll talk to you soon.

 

By Denise Lones CSP, M.I.R.M., CDEI - The founding partner of The Lones Group, Denise Lones, brings nearly three decades of experience in the real estate industry. With agent/broker coaching, expertise in branding, lead generation, strategic marketing, business analysis, new home project planning, product development, Denise is nationally recognized as the source for all things real estate. With a passion for improvement, Denise has helped thousands of real estate agents, brokers, and managers build their business to unprecedented levels of success, while helping them maintain balance and quality of life.

The Lones Group, Inc.

Comments (18)

Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Excellent blog post ! I totally agree that you need to know your market’s pulse 

Jun 05, 2020 05:25 PM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

A great list! One exception...

  • New Listings
  • Median Sales Price
  • Time on the Market (irrelevent during COVID per our MLS & Board).
  • Pending vs Active Listings
  • List Price vs Sale Price
Jun 05, 2020 05:25 PM
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Denise Lones those are very good helpful list of things to track.

Jun 05, 2020 08:10 PM
Realty Pack
Realty Pack - Bel Air, CA
Real Estate Blog

Great article, Denise. Those are very helpful tips. I think it's especially important to track the market statistics right now when everything changes so fast.

Jun 06, 2020 04:01 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for sharing this report.

Take care, be safe and have a great weekend.

Jun 06, 2020 09:04 AM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Denise- knowing this can set an agent apart from others. You let your clients know that you are on top of the market. 

Jun 06, 2020 11:49 AM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Jun 06, 2020 07:31 PM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

this is excellent advice - and this is why I like doing market repprts - those numbers are important to know 

Jun 07, 2020 04:55 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Denise Lones,

I'm so glad that Kathy Streib featured your post in her "Ah-ha" moments for the week. You are so right to keep your clients coming back to you as a trusted resource you must know and show the data in all 5 of your categories if you expect them to understand the market place and be able to move forward with decisions.

Jun 07, 2020 07:01 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon Denise Lones - I do agree with you.  These areas show be tracked because they are also leading indicators.

Jun 07, 2020 10:47 AM
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Hi Denise Lones 

This is an excellent blog post on knowing which listing stats to track and keep fresh in our heards

Jun 08, 2020 11:04 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

The statistics are important to track so we not only know what's going on but can reasonably guide our clients!

Jun 08, 2020 06:06 PM
Mimi Foster
Falcon Property Solutions - Colorado Springs, CO
Voted Colorado Springs Best Realtor

I love your presentations. This is another great one. Our List to Sales Price is now at 100.5% - impressive in this market.

Jun 09, 2020 05:53 PM
Seesan Ed
206 715 1642 - Bear, DE
Real Estate Referral Agent | Mobile Notary in DE

Denise, thank you for this informative great article. I experience that home listings in the US altogether continue to be declining during Covid-19 as well as stay home orders are not yet 100% off.

Jun 09, 2020 08:33 PM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Those are all important things to know for agents who are doing a market analysis for a client.

Jun 09, 2020 08:52 PM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I do track this information, especially when I have a new listing--I look closely at homes within a 2 mile area or so, similar neighborhoods to see competition and how fast they are selling

Jun 10, 2020 12:01 PM
Greg Mona
eXp Realty - Scottsdale, AZ
Professional Real Estate Representation for YOU!

This is all good and sound advice, Denise Lones. Knowing your numbers and current market trends are key if you want to be considered a neighborhood or local expert.  Consumers are a lot more educated and savvy than in years past, so you have to know your markets or they will detect that and go elsewhere.

Jun 10, 2020 04:45 PM
David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

Denise,

Here in Colorado Springs we have to slice and dice the numbers to an even greater level because we are such a diverse market.

We have houses built in the 1800’s, properties with exceptional mountain views, rustic properties, properties in the Black Forest and we have 15 different school districts in our county. More school districts than any other county in Colorado.

 

Jun 23, 2020 11:00 AM