How do you educate yourself with data in a shifting market?
I'm working on geofarming, and I have two issues popping up:
1. Until recently, I was able to pull data from the past 12 months to calculate higher or lower turnover rates to determine what neighborhoods had the best odds of converting. Now, there's been so much change, it's super difficult to figure out what data I need to be looking at.
2. Many of the people I call ask questions about what the market is doing, and with things moving so fast, it's not as easy to look at the weekly graphs my association puts out. These are the types of questions that make realtors either look well put together if they can answer them.
How do I need to be analyzing the market to best prepare me for these scenarios?
In order to appear "well put together", agents must be able to interpret data and housing market coverage in a way that is relevant and useful to your client and answers their questions without provoking unnecessary fear. Of course, every client has different questions and circumstances and understanding of the market, so the ability to deliver your interpretation of the market in a way that connects with the individual client is key.
- USE LOCAL SALES DATA AND FACTS. Your local MLS or Realtor Association will usually publish monthly reports with the most recent sales data (or quarterly and annually). Study these reports, as well as those from previous years if available. Familiarize yourself with what the different terms and stats mean, and how they may affect your clients.
- Break your sales data or market trend reports down into 1 month, 3 month and 12 month and you should be able to see a pretty accurate snapshot of the market. Think of it as a camera that is zooming in and out. When you are zoomed all the way in, you are only looking at what's going on this month, which tells you a lot about how many houses are sold in specific price ranges and/or how many showings sellers received, and how many listings pended, which tells us about current demand and foot traffic. As you pan out and look at the sales data from the last 3 months or most recent quarter, you can start to make interpretations about sales activity and sale prices and listing activity. Continue to zoom out and you can compare those prices and number of homes on the market to the figures from the beginning of the year, or year over year. The more you know about your market, the better. You don't need to be an expert on the US housing market as much as you need to know which neighborhoods are holding their value better, or that rental prices are continuing to improve within, or which builders are building and where, and so on.
- Avoid making predictions of the future, regardless of the direction the market is headed. It's impossible to predict the future of the market with much accuracy, and most people that try end up being wrong. There are too many different factors that affect the market, and predictions for the overall US housing market are even more likely to be way off or not applicable to your local market. Of course, every client wishes you could tell them what the future for a property holds, but in reality, nobody expects their agent to be a fortune teller. Making inaccurate predictions and statements about what will or will not happen could cost you the business down the road.
- If you have clients asking you about the state of the market, find out why they are asking. It might be because they've seen coverage on the news or read blurbs about the market online and are worried about the value of their property, or worried about losing money, or wanting to buy something below market, or they are just making small talk.
Just as important as the facts and figures and insight you offer is the way that it is delivered to the client.