In a shifting marketplace, it is crucial for consumers to understand that every headline is likely clickbait and not necessarily accurate. As a real estate professional working with people who are selling or purchasing a home, it is your job to provide context to these headlines so that your clients can make informed decisions.
Although the data in these reports is a lagging indicator, it is not a real-time indicator. For example, the data for a piece of information on closed sales reflects a period from several weeks to several months prior. You can further explain that nuance in terms of timing and how much it depends on the mechanics of your marketplace.
Managers of real estate investments need to track certain indicators in order to best manage their holdings. By keeping an eye on the right metrics, investors can better develop strategies that improve their returns. Here are a few key data points that you can track:
- Total supply of active listings on the market
- Total number of pending sales
- Median Days on Market
- How many new listings have come to market (in the last month, weekly)
- Pending sales–the number of sales in the last month, the number each week, at what price points, and perhaps the lowest signed contract
- How many closings per month
- Total number of off-market properties (also monthly and weekly)
- Median Price
- Median Discount off listing Price
- Absorption Rate
- Market Pulse (The market pulse is the ratio of the pending sales to active listings)
Real estate investment ratios help investors (buyers and sellers alike) decide whether to buy or sell a property as well as aid in tracking performance. Each ratio tells a different story, so consider them in light of the market, your client’s investment goals, and other factors when making decisions based on them.
Stay tuned for more of our blog updates to help you make sense of what’s happening in the market and speak about the topics that matter most to you. #ForwardwithFairLead
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