I was OK in Math throughout High School but I never LOVED it until I became a Realtor. Statistics tell stories. They help you put complex topics into simple terms that anyone can understand. Statistics answer questions with undeniable facts. The PROBLEM with statistics is that you need the wisdom behind the number to be able to correctly interpret what
they are telling you. The statistic might say prices are falling 4%. Are they really falling or is the high end buyer not in the market, causing the median sales price to fall?? This is where knowledge meets wisdom and having a Realtor with “feet on the ground” selling 40+ homes locally each year makes a difference interpreting the numbers.
I study statistics every day so that I can have the number behind what I know in my gut. Sometimes it takes a little time to think it through and come up with an explanation and a strategy. Throughout the first 6 months of the year I KNEW local prices were going up because I was getting bidding wars on many of my listings AND the inventory levels were down 30-40%. The numbers did not reflect this as these homes had not actually CLOSED but I knew it was happening…but NOT in all price categories. It was only happening in the lower third of the market. It had become a Sellers’ Market. The middle third was acting pretty normally and the upper third was dead as a door nail. After listening to hours of podcasts on the market, I attribute this “split market” to confusion and uncertainty in the economy. Here is a case where the numbers say the economy is strong, but is it really? The general public do not agree, causing this uncertainty.
When I did the 6 month review of our local towns, I found that the number of homes sold was at a healthy level and almost identical from a year ago. Prices were also almost flat but, as stated earlier, inventory was at its lowest point since the 1960s. Why aren’t prices going up if inventory is so low? I think that they are, but not being reflected in closed sales yet and only in the under $450,000 range. I have to point out that there are some really GREAT deals in the over $700,000 range. Some of these homes were purchased at the height of the market for $1,000,000+.
Understanding the dynamics of the market is critical to successfully counselling our clients. Check out some of my previous blogs on working with Buyers in a Low Inventory Market and Working with Sellers in a Split Market.