February 25, 2014: Generally speaking, other than the price and loan interest rates, the "other numbers" in Real Estate are rarely mentioned. There is a whole group of “other numbers” that play a vital role in the real estate industry… Therefore, the phrase “by the numbers” can often signal a call to home buyers and investors to “buy the numbers.”
For example, how often do you hear comments like the following? ”What a low inventory of homes for sale we have right now?” Then a few minutes later, the comment, “The market sure is heating up, property is selling really fast in my neighborhood.” Given these two seemingly contradictory statements, is the market going up or going down? The answer is that the two sets of numbers which validate both statements also provide valuable insights into “how they can be occurring at the same time and “why” they complement each other in the market place.
For clarity, aside from consulting with your favorite, licensed REALTOR, a look at the numbers will tell the story. The key is to compare the numbers by looking at one time period over another. If in January of one year: 450 homes sold in a given market during an 45 average days on the market, with a median sale price of $525,000. Followed by January a year later with 625 homes sold, 31 average days on the market and a median price of $570,000, this is a relatively “midterm indicator” that that property values are clearly going up and the market is experiencing brisk sales year over year. Now if during that following January only 310 homes sold, in 80 days on the market, at a median sale price at $480,000, this would most likely indicate that the market is down but depending on more recent and local numbers, could in fact, be heading for a rebound.
What do you do with the numbers? If you are a buyer, the obvious answer is that a good time to buy is as the market is declining. If you are a seller, the obvious answer is: don’t sell in a declining market unless you are planning to recline into retirement, need to relocate for your job or other compelling reasons! Real estate cycles fluctuate up and down continuously and the numbers are one of the best ways to determine which way it is headed in the future. As REALTORS, we not only analyze the numbers year over year, but month over month, week over week and even day by day on both a national and local scale. The numbers are “not a perfect predictor of future success,” but they do help get us closer to market direction reality than almost anything else. This can be an invaluable asset in deciding which real estate “play” would be your best bet and less of a gamble.
— William Curry
ACCESS REAL ESTATE