KEY MARKET MOMENTUM INDICATORS
The trend in America is the REALTOR being seen by their clientele as an Agent Economist. Sound daunting? It’s not.
It is just understanding how to present meaningful data that gets you hired! We will create the reports for you for both the listing interview and the seller servicing cycle.
Indicator #1 – A healthy wind is necessary for the forward movement of a sailboat. When it does not exist, the boat sits idle.
The same is true of a real estate market. It needs a healthy supply of buyers. When the buyers are scarce, the market remains flat or sinks in value.
As the property enters the market, there is usually some level of “pent up demand” for the new listing. The agent that usually gets hired by the seller is the one that can best describe “market conditions” and property valuation better than the competing agents.
So how do you know truly know the volume of buyer “pent-up-demand” and how that affects the asking price?
Comps never tell you the depth of buyer pent-up-demand nor does price per square foot. Those are the number one methods used by traditional agents to determine an asking price. Yet they don’t measure the most important thing when you are selling a home. This is why some properties get 11 offers in 24 hours and some get none after trying for a year.
Have you ever had a seller want to list a property higher than you thought practical?
We all have! The objective of the traditional agent during the listing interview is often to discuss their “marketing plan” while the objective of the Agent Economist is to discuss their knowledge of “market conditions.” As agents, we should double the time we invest during the listing interview talking about the marketplace, and cut in half the time invested in a marketing plan. HomeZoop equips you for that conversation.
Knowing what you know about real estate,
“whom would you hire”, the “marketing pro” or the “pricing pro?”
Indicator 1 - Case Study
A recent report in Jan 2020, in a midwest suburb showed an area with 15 homes for sale and no homes under contract. Those properties, when they did sell, had sales prices that reflected 2004 prices. Half of the listings were not selling, even in a healthy local economy is a AAA school rated area. What happened?
When 46% of the listings do not sell, with an average days on market of 108, it is do to an absence of buyers. When this occurs, prices plummet.
Understanding “buyer pent up demand” is essential to pricing property. When an oversupply of sellers meets a market with an undersupply of buyers, the unthinkable is happening, prices are generally depreciating.
Indicator #2 – Do failed or expired listings affect the property value?
Most Realtors and consumers review closed sales to determine a list price for their home. However, rarely are failed listings considered. In fact, failed listings (expired or withdrawn) are often guideposts to tell you where “not to price your property.”
It is okay to have expired or failed listings, that is to be expected, just not too many.
If your report shows just 10% failed listings, as a result of high-demand by buyers, you are possibly seeing 30-40-50% selling over the asking price. In addition, you are probably seeing more under contract than there are for sale. This local economy is most likely experiencing appreciation.
However, if your report shows 40-50% of the listings expiring, failing to sell, as a result there may only be 10% of homes selling at list price. And there is most likely 2-3-4 or more sellers for every one buyer. For sellers, there is often a sense of urgency to “get the next buyer in the marketplace” as buyers are scarce. A scarcity of buyers for any product, will create a reduction of value. This local economy, in its particular price point, is quite possibly experiencing depreciation. A painful reality for homeowners.
“Economists conduct research, collect and analyze data, monitor economic trends, and develop forecasts. That is what HomeZoop does for you. Just print and present and you are ready to go.”
Indicator 2 - Case Study
As we look to some markets like California, failed listings are rare. There is a tremendous oversupply of buyers. Many homes are appreciating at 3-5% per month, not due to the seller making massive improvements, rather to an oversupply of buyers which is causing amazing annual appreciation. We recommendthat you review the expired listings when establishing your list price. They will inform you of what buyers are rejecting.
Indicator #3 – Can properties selling over list price cause our home value to go down?
Most real estate markets across the USA, have some level of buyer pent-up-demand that cause some properties to sell at or over the list price.
In a healthy market, you will often see about 30 of every 100 homes sales close at list price or above, which is often a contributing factor to 2-3% appreciation rate for property. When it becomes 50-60% of sales reaching that pinnacle, it is often a sign of “super high buyer demand” and oftentimes under pricing has occurred.
On the other hand, a warning sign that the market may be declining in value, is when only 5-10 out of 100 properties sells at or over the asking price. It shows a weakness in the market. An absence of buyers bidding against one another. This often causes property value to remain flat or possibly depreciate.
So yes, when there is an absence of “over bidding” it is a warning sign that there is a low presence of buyers in the market.
“Zillow, Trulia, Redfin, Realtor.com predict property value
HomeZoop predicts the probability of those values”
Indicator 3 - Case Study
An agent shared a story of a home with multiple offers. It had been listed for $1,100,000 and on the day it was listed it received 21 offers, selling for $200,000 over the asking price. Clearly the price should have started higher. It is essential to the pricing decision to understand the “market momentum” to avoid over or under pricing a property.
Choose to be an Agent Economist
As agents learn to read the warning signs in the housing market, they become more valuable to buyers, sellers, relocation companies, divorce attorneys, CPAs, financial planners, builders, investors, people that pop by open houses, sellers in geographic farms and so on.
Your HomeZoop report will equip you to educate the consumer. Choose to be an Agent Economist and you will win almost every listing, setting you up for a lifetime of referrals and creating valuable referral pipelines from influential professionals.
Your HomeZoop Agent Assignment!
Try to run a HomeZoop report on some previously expired listings. The information may allow you to reach back out to a client and get them relisted with newly discovered information regarding the health of the market.
Can you relate to any of the situations below?
Do you know what they may have cost you in the last 12 months?
1. Do you ever interview and not win the listing, losing both the seller and the seller’s next purchase?
2. Have you interviewed for an overpriced listing, only for them to go with another agent, and eventually drop their price to one you suggested?
3. Perhaps your system to convert buyers online, at open houses, sign callers is superb. But could you use improvement in that area? What would it mean to convert 5-10 more buyers in the next few months?
4. Are you prospecting FSBO and Expired listings and not achieving results? Would being seen in a different light raise your value and conversion rate?
5. Have you ever set your sites on landing a corporate account? Are you equipped for that or would guidance and strategy be a benefit to you?
6. Do you send out marketing campaigns and rarely get “pinged back?”
If you would like to have a brief question based, idea filled 30 minutes conversation, “ping me” and we will have a powerful conversation. If not, we do hope this data and our reports serve you to win your next listing and sell it in the first few days.
Our best to you,