Here is some important info for both buyers and sellers. I would love to know your thoughts.
4 metrics I think are not relevant at the moment in the current market.
Check my video below for a quick primer.
Asking Price:
Very subjective at the moment. With the amount of properties sitting on the market for extended periods we can not look at current asking price as many of the properties are over priced. The pricing your listing Sold data is more important, the more recent the better. Looking at sold prices from 3 years ago can lead to an incorrect conclusion. Just because Mr. Smith down the street for a million for his property (not as nice as mine of course) doesn’t mean the current market will bring a million. If a listing is sitting on the market for an extended period then price can be a barrier to making a deal.
Over Asking, a marketing strategy:
This is strictly a metric that Agents use to promote themselves. During the crazy market ie. covid when everything was selling in multiple offer bidding wars people started to focus on how much a property sold over the original asking price. This became a point of pride for the seller and agent to say “We got 100k over ask” or the like. In a hot market there tends to be multiple offer situations when more than one buyer is bidding on a property just by accident. What has happened in current real estate methodology is that a property is brought to market with a lower than market value price and an offer date days from the original posting date. This is strictly a method of market manipulation to garner an over asking result. It has no bearing on the property or sale price as it was crafted to gain the intended result. In a slower market like today we see this marketing methodology failing in most cases.
Number of Offers:
While this can be an indication of a healthy market it can be misleading. If the asking price is exceedingly low then most offers that come in on offer day will be under the expectation of the seller. Especially if they are coming from uneducated buyers and agents. Ie. Those who did not research the true value of the property. This again is just a talking point for the agent and seller.
Number of showings:
This can be an indication of the overall health of the market however it can also be manipulated ie. when the listing price is grossly undervalued you tend to get more showings as buyers are looking for “An amazing deal”. I do believe overall the number of showings you get for your listing certainly is a measurement of the buyers interest in the property. The one caveat is that you need to be aware of why that interest in coming. Is it a lowball price or is the property getting genuine buyer interest. If you are getting no or few showings then there needs to be more research done and perhaps a change in strategy.
Now more than ever be sure that you are looking at the right numbers and using all the data available to determine what the true value of properties are in today’s market.
Click here to see the video:
