Isn’t real estate data just for people who like math and numbers and wear pocket protectors? Not at all. Understanding the trends of the market can make a huge difference with business and marketing for anyone in the real estate industry. Let me unpack what I mean. I’d love to get your thoughts below too.
Three reasons why knowing real estate trends is NOT just for data geeks:
- Be the Professional: When you study real estate trends, you hands-down become the professional. People will start to look to you for insight in meetings, online and wherever you are. Because you are in the habit of doing your homework, you are able to quote market statistics off the cuff. You can talk about the exact amount of housing supply, percentage of FHA buyers, number of cash purchases, unemployment, interest rates and other influences that are driving the local real estate market. Bottom line: Knowing trends boosts your credibility.
- Be a Resource to Clients: Clients feel more confident when you can talk definitely about what is happening in real estate in specific terms. It gives them security that you know what you are talking about and that you are giving them good advice. For instance, consider which sounds better: “There are more houses for sale right now than in past months” or “Inventory is now at 2.1 months in Sacramento County, which is double of what it was several months back”.
- Know Your Future Clients: When you pay close attention to numbers, it’s possible to get a glimpse of who your future clients might be. For instance, when we see FHA increasing and inventory on the rise in Sacramento County, this tells us buyers are gaining more power (and there will be more sellers to work with too). Also, keep in mind Fannie Mae’s 97% loan is going away in mid-November, which will help increase FHA’s prominence in the market. Cash has been moving out-of-town too, which is important to consider if the bulk of your clients are investors who entered the market a year ago when the market was red hot. On the other hand, since foreclosures only represent 5% of all sales in Sacramento County, it’s probably not the best time to try to be an REO specialist. Similarly, short sales used to be well over 30% of the market, but now they’re only 15%. There is definitely still a need for short sale service, but the downward trend is worth considering for the long term.
BONUS MATERIAL: Some places to go to study local market trends
- The Sacramento Appraisal Blog: I know, I just mentioned my own blog. But I work hard at what I do and I think I’m providing helpful information. If you read the “market trends” category carefully, I go over stats every single month. If you don’t want to miss posts, then subscribe by email.
- TrendVision: Any member of the public can go the public Trendvision link here and create all sorts of graphs. For MLS subscribers though, there is much more detail. When you log in to MLS, click “Trends” on the navigation bar. There is so much great information there, and you can search by zip code, area or county. Whenever you are working a neighborhood, take a minute to quickly look over things like inventory, median price and average price per square foot (do a 6 or 12-year glance of the market too to get a better perspective).
- Sacramento Association of Realtors: If you haven’t bookmarked the statistics page for SAR, go do it. If you are a member, you can log in under “Realtors Only” and there is a ton of historical information and even graphs.
- Websites & News Outlets: For local real estate news you might want to check out The Wright Report, Altos, Department of Numbers, FHFA Price Index, Freddie Mac Price Index, DataQuick, Calculated Risk Blog (search for “Sacramento”), Sacramento Business Journal, Sacramento Bee etc… You can check out Sacramento Landing too, but unfortunately the blog has not been updated in a long time (see the list of data sources on the sidebar though).
- EDD: Unemployment rates for California and local cities.
I hope this was helpful. I’d love to hear how you use data and trends in your business.
Question: What other data sources do you use or suggest? Comment below.