Market Analysis - Are There Buyers in an Area?

Investor · Hawthorne, NJ · Member since 2017 · 31 posts · 12 votes

Hi All,

I'm working my way through "The Book on Flipping Houses" by J Scott, and am currently working to identify a prospective farming area.

When trying to gauge whether there are buyers in an area, J suggests that at least 60% of listings should eventually sell. Would comparing the number of active listings per month to the number of sales per month over a 12 month period give a general sense to this metric?

Also, if anyone has any of their own tips on how to get a sense of the number of buyers in an area, or just market analysis tips in general they would be appreciated.

Thanks!

Brian

0 Reply

57 views

Most Popular Reply

Mike Flora

Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes

@Brian Kittner another thing to look at is what is pending sale that is a close match to your property in the area. I find pending sales, look at the pictures to see what I’m gonna have to do to get the desired price against my competition. Then I will call the listing agent on those pending sales to see if they got full asking, did appraisal come back good, how many showings did they get before they got an offer etc etc. Southern California has slowed and dipped a little in certain areas so only looking at recently sold properties is not the way to go. You have to look at what’s up for sale and pending sale cause that’s gonna be your competition!!!

4 Reply

See this reply in the discussion

22 Replies

Jump to latestLatest

Sort by

J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
7y
Hey Brian,
If you pull a report on the number of sold versus expired listings over the past 12 months, this should provide the information you're looking for. In addition, take a look at the trajectory of inventory (days on market) and the trajectory of median sales price as well. These days, most markets will have buyers, but the bigger question is whether the number of buyers is increasing or reducing and whether prices are increasing or decreasing.
Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)
3 Reply
Brian KittnerPro Member
OP
Investor · Hawthorne, NJ · Member since 2017 · 31 posts · 12 votes
7y
Very helpful, thank you for the insight @J Scott!
1 Reply
Christi HawkinsPro Member
Columbus, OH · Member since 2017 · 237 posts · 142 votes
7y
@J Scott I just have to say again how much we appreciate you always taking time out of your busy schedule to help people just starting out.
2 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Originally posted by @J Scott:

Hey Brian,

If you pull a report on the number of sold versus expired listings over the past 12 months, this should provide the information you're looking for. In addition, take a look at the trajectory of inventory (days on market) and the trajectory of median sales price as well. These days, most markets will have buyers, but the bigger question is whether the number of buyers is increasing or reducing and whether prices are increasing or decreasing.

I am not sure about other markets however in our markets on the west coast the title companies track this and send out weekly reports for free .. this one is address to my wife .. but I get them to.. they have current listings in numbers average day on market. price going up or down.. lowest listed in a market Highest listed.. then a little speedometer thingee that gives market sentiment. IE buyers market neutral or sellers.. we are still slightly sellers in Portland Major metro for instance. So one might check with their trusted title company if you can get on this feed.. in Attorney closings states I have not seen much in the way of customer service IE fringe benefits for free from those .. they just do the paper work and close the deals.. Our title companies are highly competitive and as you can see do a ton of the heavy lifting for us.. And you don't need to be an agent to get these.. you have to ask nicely though :)

Hi Lori - here’s this week’s market report!

Access your report(s) for

A few questions these reports can help you answer:

Is now a good time to buy or sell? Check the “Market Action Index” to see if the market is heating up or cooling down.
How’s the market in my price range? Click into the “Market Segments” charts to see the how the market is behaving.
What can I get in my price range, and where should I look? Use the “Median List Price” charts to see what buyers are getting for their money.

To view market stats on other areas, simply enter the Search button at the top of the page. Feel free to share this report with clients or on social media, and please let me know if you have any questions or need additional resources. I’m happy to help in any way I can!

Kim Mitchell
Sales Executive |

Podcast Guest on Show #222

JLH Capital Partners51 Review

Website View Page

3 Reply

Christi HawkinsPro Member
Columbus, OH · Member since 2017 · 237 posts · 142 votes
7y
@Jay Hinrichs Thank you for sharing. This a wonderful source of information
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Christi Hawkins:

@Jay Hinrichs Thank you for sharing. This a wonderful source of information
Yup our summer home is in Lake Oswego.. and of course we are quite active there .. so this is very good info we get weekly.. you can click on the individual cities and it will pull up the reports.. so people that love reports and graphs and data and such its all right there and you don't have to wait for your realtor to pull this info ..
So my wife gets these and when she is working with a client she sets that client up on the feed.. in the specific area they want to buy. helps keep everyone informed.. So like in our area were average list is a little over a Million.. investors are not going to come in and start making offers at 500k.. they can see right there it wont fly..
Like I said most of the smaller mom and pop closing companies I deal with back east don't really have anything in the way of customer service these are the actual insurance companies that also own the escrow function so there are no attorneys and you have big corporation backing so they can afford to mine this data and give it out.. As you can see they encourage sharing it.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
Christi HawkinsPro Member
Columbus, OH · Member since 2017 · 237 posts · 142 votes
7y
@Jay Hinrichs I wish all title companies offered customer service like this.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Christi Hawkins:
@Jay Hinrichs I wish all title companies offered customer service like this.
You marry this data with the Property Radar app we have here and as an investor you miles ahead of those that just wonder around in the forest.. or want to rely on others to do their homework for them
google Property Radar and see how powerful that tool is.. right now its west coast based but I believe they are looking to expand. Now PR is not free but its DIRT cheap for how robust it is.. not like buying these BS lists I see people pay huge money for.
I was at a trustee sale yesterday in Vegas.. looking to buy a few props.. we got shut out.. but 3 were sold.
one I was tracking was with Auction .com and we have their direct web feed on status of the auctions.. Property Radar has their own way into this as well. we got notification 30 minutes before the Cryer sitting there in real time said sorry sale postponed. LOL ..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
2 Reply
Christi HawkinsPro Member
Columbus, OH · Member since 2017 · 237 posts · 142 votes
7y
@Jay Hinrichs Thank you I'm going to check that out right now
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Christi Hawkins:

@Jay Hinrichs Thank you I'm going to check that out right now
Ya pop back on and let me know what you think of PR.. We make significant profits with this app beating the competition to deals..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Mike Flora
Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes
7y
@Brian Kittner another thing to look at is what is pending sale that is a close match to your property in the area. I find pending sales, look at the pictures to see what I’m gonna have to do to get the desired price against my competition. Then I will call the listing agent on those pending sales to see if they got full asking, did appraisal come back good, how many showings did they get before they got an offer etc etc. Southern California has slowed and dipped a little in certain areas so only looking at recently sold properties is not the way to go. You have to look at what’s up for sale and pending sale cause that’s gonna be your competition!!!
4 Reply
Brian KittnerPro Member
OP
Investor · Hawthorne, NJ · Member since 2017 · 31 posts · 12 votes
7y
@Jay Hinrichs very interesting I have never heard of this. As of now I'm lucky enough to have someone close to me with access to the MLS in my area, but definitely good to know for OOS analysis. Thanks for the tip!
0 Reply
Brian KittnerPro Member
OP
Investor · Hawthorne, NJ · Member since 2017 · 31 posts · 12 votes
7y
@Mike Flora wow I like this idea, makes a lot of sense! I'm sure this had helped you avoid what would have otherwise been "unforeseen" difficulties with additional holding costs and appraisal surprises. Especially for someone like me doing a first deal or even just jumping into a new market this could save a lot of heartache. Thank you Mike!
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Mike Flora:

@Brian Kittner another thing to look at is what is pending sale that is a close match to your property in the area. I find pending sales, look at the pictures to see what I’m gonna have to do to get the desired price against my competition. Then I will call the listing agent on those pending sales to see if they got full asking, did appraisal come back good, how many showings did they get before they got an offer etc etc. Southern California has slowed and dipped a little in certain areas so only looking at recently sold properties is not the way to go. You have to look at what’s up for sale and pending sale cause that’s gonna be your competition!!!
that's interesting agents are not suppose to disclose pending sale prices.. I can hardly get an agent to answer the phone these days at all and I am a broker.. LOL.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Mike Flora
Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes
7y
@Jay Hinrichs LOL I get a couple that talk Jay. Not all of them give up the info, Im just transparent with them and tell them what I got and sometimes I just get....."its very close to listing price, " or they will give up the exact number. All that info gives me a good enough idea of where my property sits in value once I'm done with rehab. We can't just look at recently sold down here in California anymore and then expect 3 offers in 4 days.
1 Reply
Christi HawkinsPro Member
Columbus, OH · Member since 2017 · 237 posts · 142 votes
7y
@Jay Hinrichs it's amazing just like you said. They need to develop something like that for this part of the country It would pay for itself pretty quickly
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Christi Hawkins:
@Jay Hinrichs it's amazing just like you said. They need to develop something like that for this part of the country It would pay for itself pretty quickly
@Sean OToole I have copied Sean OToole its his company.. I bet he would love feed back from those in other parts of the country..
When you get out into the east information that we take for granted on the west coast is much tougher to get..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
Sean OToole
Investor · Truckee, CA · Member since 2013 · 546 posts · 445 votes
7y
Thanks @Jay Hinrichs. @Christi Hawkins we are working on it now, should have a beta version available to start testing early to mid summer. Best, Sean.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Sean OToole:

Thanks @Jay Hinrichs. @Christi Hawkins we are working on it now, should have a beta version available to start testing early to mid summer. Best, Sean.
it will be huge out east .. the smaller closing attorney shops simply have very limited customer service like we have out our way.. your product will be a huge win for all those out east..
also just as a data point for you and your team.. I was in Vegas at the trustee sale on Friday there was a property I was going to bid on.
it was an Auction.com one.. We have the auction app and it kept saying it was pending ( which means waiting for bank to communicate opening bid).. well we pop on PR and you already had it as postponed.. then 30 minutes later Cryer says Hey wispy is postponed.. so your info was quicker than the actual company doing the sale.. so my compliments. One thing would be cool though is to know if you on the other end get drop bids or last second additions on the app.. one came up that the hedge fund guys got because it was a late addition and no one was tracking it.. I have to get back to my old days of tracking everything.. cant let wall st beat us to all of these .. LOL
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
Sean OToole
Investor · Truckee, CA · Member since 2013 · 546 posts · 445 votes
7y
@Jay Hinrichs sorry about the one you missed. Did we not have it all, or just not the drop bid? We definitely work to track everything including drop bids. Not sure what you mean by "last second additions", it isn't legal to post new sales at the last second. ???
We've worked hard over the years to convince trustees to post drop bids early, but we still see them get announced at the sale fairly often. Unfortunately the only way to deal with that is to research everything with the assumption the bid may drop. :-(
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Sean OToole:

@Jay Hinrichs sorry about the one you missed. Did we not have it all, or just not the drop bid? We definitely work to track everything including drop bids. Not sure what you mean by "last second additions", it isn't legal to post new sales at the last second. ???
We've worked hard over the years to convince trustees to post drop bids early, but we still see them get announced at the sale fairly often. Unfortunately the only way to deal with that is to research everything with the assumption the bid may drop. :-(
Sean we are just getting started in this market and I am teaching my ground partner here the ropes.. as such we are not tracking everything like we used to in Oregon.. I fully understand how that works.. We will get there over time.. we have a modest goal of 1 to 2 homes a month.. the hedges here are still doing 3 a week or so.. but we cant compete with buy hold. we need larger margins on the flip business..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
7y
Hmm...there are a lot of ways to look at the data and come to a conclusion about it.
Lies, damn lies and statistics comes to mind.
Garbage in, garbage out does too.
But I am a cynical appraiser, who won't appraise anymore, because I am a little too good at math, and a little too honest to do it anymore. Many of my "peers" however, charge me as incompetent, and have other things to say on the subject. Let 'er rip. Computers will likely replace appraisers, and that is going to be much worse than simply dealing with the flaws of humans. The bright side will be, you will get approved for a loan in a few clicks, because who cares, the taxpayer will bail it all out anyways, and money can be re-printed as fast as it is lost. Sigh.
Anywhos...what were we talking about? O, statistics. Right.
I think you are attempting to determine the absorption rate and months of existing housing stock right? Which could give you an idea of how long it might take to sell?
That goes like this, but you will need access to the data and plug in the right data too:
Total number of closed sales in the prior year, divided by 12 = average number of sales per month in the prior year (historical absorption rate)
Total number of active listings, divided by the absorption rate = likely number of months it will take to sell the existing stock (months of housing supply)
Now, if you have the data that will tell you how long it is currently taking to sell property, called the DOM or Days On Market, you can compare that to your results, and get an idea if the market is getting better or worse as compared to last year.
Hopefully the realtors in your area are not playing with the data, and causing the DOM to reset. Naughty naughty.
If you have access to average DOM data, be weary of where it comes from. I've found the MLS algorithms to be interesting too. You might want to do your own calcluation, again if you have access to reliable data.
But besides all that and just going for it, as a general rule, so long as the entire economy is not in the crapper, all properties sell, usually quickly, when appropriately priced.
It's usually an over-priced property, or a property with issues, that keeps it from selling, if that is the concern you are trying to work out.
As far as identifying areas to farm (lol I thought you were trying to buy a farm on the first read) well, if you don't have access to the data to figure it out, maybe following the leader is your best bet.
Best thing about the Zillows of the world is they publish solds. You can see the sale price and sometimes look at the interior photos. Look at a few thousand of those (not kidding), and the trends will begin to show themselves. And on that note, let me leave you with this one little piece of sage advice, if I do say so myself - one comp does not a market make.
...but but but, the house down the street sold for X...
Yes, yes it did. And your point is?
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.