Do You Adjust for a Fluctuating Market?

By
Real Estate Agent with Coldwell Banker Realty ~ 512.750.6899

Are you savvy in recognizing market signals that call for you to make a market adjustment?

A market adjustment is a change in market parameters or conditions brought about in response to one or more market signals. They can include price changes from shifts in supply and demand and often is referred to as cycles, fluctuations, or trends.

In many areas a shift or correction in the market is being seen. It’s important to monitor active and pending properties just as closely as solds. Being hyperaware of your current competition is crucial as buyers now have more options with inventories increasing. 

Recently I took a continuing education course offered by Independence Title Company. They are a title company I depend on for excellent service and their courses are taught by the best business development people. Leslie Van Burkleo was the presenter on this class and the materials were an eye opener.

I learned in preparing a market analysis for a seller there are 5 technical calculations to adjust for fluctuation.

  1. 1. Calculate the difference between the average sold price of the current month and the average sold price of the same month last year.
  2. 2. Divide the price difference by 12. This is called the Rise Per Month.
  3. 3. Figure the difference in number of months between the current month and the month the comp sold. Multiply the difference against the rise per month. This is called the Total Rise.
  4. 4. Calculate the percent of total rise by dividing the Total Rise by the Current Month’s Average closed price than multiply by 100. Total Rise/Current Month X 100 = Percent in Total Rise.
  5. 5. Multiple the Percent in Total Rise against the closed price of the comp you’re using adjusting. This is the total you should adjust the comp by.

   

Taking the time to calculate the 5 adjustments will be like finding all the pieces in a puzzle. It will give you an accurate picture of how market fluctuation affects your seller's property. Knowledge is power and knowing how to add something more of value to your current CMA’s for sellers set you apart from your competition.

It's just adding another dimension to the overall assessment when reviewing all aspects of the market as it relates to pricing a seller’s home and setting proper expectations. The more data that we have in our tool box the more we can help our sellers make an informed decision.

“Strategy is about setting yourself apart from the competition. It’s not a matter of being better at what you do – it’s a matter of being different at what you do.”  Michael Porter

 

 

 

 

 

 

 

Posted by

Austin TX Canyon Creek Real Estate Agent

(512) 750-6899
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I specialize in Listing and Selling homes in the NW Austin Area. I use my experience to guide clients through the process, whether selling or buying. It’s a beautiful thing when your career and a passion come together. I love what I do!

Comments (20)

Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Dorie. Not sure I totally agree but need more coffee to think it over. Incorporating this in your presentation will definitely separate you from the competition. For that reason alone, it is good! Enjoy your day.

Jun 15, 2022 05:14 AM
Dorie Dillard Austin TX

It's just another dimension to add especially when a market is shifting Wayne Martin 

Jun 15, 2022 05:55 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Dorie Dillard Austin TX  I always liked the way you think . It is inside and outside the box 

Jun 15, 2022 05:40 AM
Dorie Dillard Austin TX

Thank you Hannah Williams 

Jun 15, 2022 05:53 AM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
Relocation to NW AZ with elbow room & more freedom

These calculations give another picture. I agree with Wayne Martin that I am not in total agreement. For appraisals, this may help to better understand if the appraisal will come in at value or below.

Jun 15, 2022 05:46 AM
Dorie Dillard Austin TX

It's just adding another dimension to the overall assessment when reviewing all aspects of the market as it relates to pricing a sellers home and setting proper expectations Leanne Smith 

Jun 15, 2022 05:57 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much, Dorie, for sharing this advice.

Keep cool and have a great day.

Jun 15, 2022 05:55 AM
Dorie Dillard Austin TX

Thank you Roy Kelley !

Jun 15, 2022 05:59 AM
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo and Home Specialists

Interesting about the Rise per month Dorie. I think all the tools we can learn from others will help in our business!

Jun 15, 2022 06:44 AM
Dorie Dillard Austin TX

I agree Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400 

Jun 15, 2022 07:54 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Dorie - those are excellent points calculated rise per month.  Knowledge is power and if you don't measure it you can't manage it.

Jun 15, 2022 06:59 AM
Dorie Dillard Austin TX

You are so right Grant Schneider 

Jun 15, 2022 07:55 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Dorie, very good information to share, as our market has shifted since the end of March.

Jun 15, 2022 07:18 AM
Dorie Dillard Austin TX

Its shifting in different parts of the country and with our current economic woes its going to continue to shift Joan Cox .

Jun 15, 2022 07:56 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Dorie,

This is very interesting.  I am going to copy this formula down and apply it to my current listings.  Our market is softening.  So I am aware that pricing is a determining factor.  NOW!  Try convincing the seller.  This may help.

Jun 15, 2022 07:21 AM
Dorie Dillard Austin TX

The more data that we have in our tool box the more we can help our sellers make an informed decision Sheri Sperry - MCNE® .

Jun 15, 2022 07:57 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Dorie - adjusting and adapting a part of everyday life.  That's definitely experienced in real estate.  

Jun 15, 2022 08:23 AM
Dorie Dillard Austin TX

It is even more important in the spirling downward economy we are experiencing Michael Jacobs !

Jun 15, 2022 01:04 PM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

I seem to always be calculating market trends and closings to discuss with my clients Dorie 🙂

Jun 15, 2022 08:50 AM
Dorie Dillard Austin TX

It is so important Paul S. Henderson, REALTOR®, CRS with the shifting we are experiencing communication is so important with our clients.

Jun 15, 2022 01:05 PM
Kathy Streib
Cypress, TX
Retired Home Stager/Redesign

Dorie- I agree with you!! The more tools you can add to your professional agent toolbox, the more effective you can be. It doesn't mean you have to use all of the tools but you know what they are and you have them available to you. That will set you apart. 

Jun 15, 2022 10:30 AM
Dorie Dillard Austin TX

I agree Kathy Streib . Always good to have a bank of resouces to utilize..some more than others.

Jun 15, 2022 01:06 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Dorie good information.  looks like your blog is presenting an interesting point of view to think about.

Jun 15, 2022 01:02 PM
Dorie Dillard Austin TX

Hi George Souto ..The more data that we have in our tool box the more we can help our sellers make an informed decision.

Jun 15, 2022 01:07 PM
Andrea Bedard
Thompson Company, REALTORS® 240.593.2860 - Silver Spring, MD
Fluent in Real Estate & German, M.A. ABR ASP CIPS

Thank you for sharing Dorie! I agree, we can never have too many tools in our toolbox. The challenge is going to be the managing of expectations. It's hard to grasp when the neighbor or friend just sold for a 100K more why one shouldn't have a similar expectation. Using these calculations can help illustrate the changing market. 

Jun 15, 2022 01:49 PM
Dorie Dillard Austin TX

Its going to be the hardest thing we do to explain to future sellers but the more data we can provide the better they will grasp what is happening Andrea Bedard .

Jun 15, 2022 04:01 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Your statistics approach is a solid one!  That type of knowledge is invaluable in helping clients make educated decisions about real estate!  I'm thankful for the opportunity to subscribe to the Cromford Report wherein a TON of graphs and charts are at my fingertips with this type of information.  Good for you!

Jun 15, 2022 03:33 PM
Dorie Dillard Austin TX

Thank you Jan Green - Scottsdale, AZ . We do have to be the source of the source and data improves our trustworthiness.

Jun 15, 2022 04:02 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

We are definitely experiencing a market shift here in Sacramento.  Adjustment is often required to move a property, when these shifts occur.

Jun 16, 2022 04:16 AM
Dorie Dillard Austin TX

I agree Myrl Jeffcoat 

Jun 16, 2022 04:56 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

CONGRATULATIONS Dorie, on having this blog FEATURED in the Old Farts Club group!  

Jun 16, 2022 04:16 AM
Dorie Dillard Austin TX

Thank you Myrl Jeffcoat !!!

Jun 16, 2022 04:56 AM
Elyse Berman, PA
Best Connections Realty, Inc. - Boca Raton, FL
Boca Raton FL (561) 716-7824

Very interesting point Dorie Dillard Austin TX .  I am bookmarking this as it seems another good tool to have in your box.   Thank you!

Jun 16, 2022 09:44 AM
Dorie Dillard Austin TX

Thank you Elyse Berman, PA 

Jun 16, 2022 10:43 AM
Peter Mohylsky. BRIX REALTY
Miramar Beach, Florida - Santa Rosa Beach, FL
BRIX REALTY -DESTIN

I need to play with this but it is intriguing

Jun 16, 2022 01:46 PM
Dorie Dillard Austin TX

With the market changing..just some more data to compile to help sellers understand the market Peter Mohylsky. BRIX REALTY 

Jun 16, 2022 05:48 PM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Segments of your local real estate market heat up, cool off or steady as she goes. The local real estate professional has his/her finger on the pulse and knows the best plan of attack in the list and sell. Or better. Pricing a property to reflect the current local market value is a beautiful thing. The days on market is always tells a tale but lack of marketing... too little effort put into the staging, imagery, video, narrative takes its toll too Dorie Dillard Austin TX ! How you promote your listing, your area, your local expertise in the reach and exposure is everything in any market regardless if it's hot, cold or meh. Stay excited, make it passionate, fun, helpful to save buyers, sellers, you  time.

Jun 24, 2022 03:45 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

This is an excellent post with great information. Thanks for sharing it.

Have a super fantastic week!
Joe Jackson, Realtor-KWCP

Jun 27, 2022 09:02 AM