Providing data support and interpreting numbers allows our buyer clients to make quick, informed decisions, writes Luke Babich.
In today’s market, buying a home can feel scary. Some buyers are deterred by high mortgage rates, especially with 35% of homeowners locking down their rates below 6% during the pandemic’s historic lows. Years later, homeowners may have outgrown their home or want to downsize, but dramatic changes in the market have made moving feel impractical.
For experienced homeowners and first-time home buyers alike, navigating the unpredictability of the market can be daunting. In some markets, homes can go for months with no offers, while in others homes are gone in a week.
This can be especially frustrating for first-time buyers trying to determine where to enter such a difficult and expensive market.
Despite what your clients may think, local inventory data is a tool that can help first-time and seasoned home buyers find homes that fit their needs.
14 tips for using local inventory data to motivate buyers
Here are 14 ways to use data to help your customers find a home.
1. Highlight the Reduce option
In such a volatile market, predicting the future can be difficult. Why not take a look at the past? Comparing current active listings to last month’s listings reveals a market where growth is slowing even though inventory levels are increasing year-over-year.
2. Number it
It uses data found from the previous month to show you how many buyers are competing for each home. Homes that are under contract within the last three months mean the market is active and competition is high. This day-on-market snapshot creates a sense of urgency that motivates buyers to enter and trade.
3. Compare new properties and sold homes
Analyze the number of homes for sale and the number of homes for sale using the tools at your disposal. If the first number is greater than the second, let the buyer understand that the pace is accelerating and they need to act quickly.
4. Compare list price and sales price
Shows homebuyers the latest average asking price to sales price ratio. This shows the amount offered and the percentage of the price reflected on the closing sheet. In areas where this ratio is over 100%, waiting can mean paying more for the same type of property later on.
5. Track remarket frequency
Track how rarely homes are put back on the market. If very few deals close, it’s a sign that buyers are aggressive, and second chances are rare for most homes.
6. Drill down into neighborhoods
The city’s real estate market may seem balanced, but take a closer look at the areas your customers want. There are local rarities that are specific to the neighborhood, which can prompt buyers to make faster decisions. This hyperlocal expertise matters to consumers. In fact, 75% of buyers and sellers rate it very valuable or very valuable for their agent to have local market and region-specific knowledge.
7. Take a closer look at housing price ranges
Both first-time and veteran buyers have budgets, so it’s important to gather data for specific price ranges. Depending on the market, some price points may be more rare than others. Homes priced slightly below or above the area median price face more competition and tend to sell more consistently, while more expensive properties sell more slowly because there is a smaller pool of qualified buyers.
8. Examine property types
Buyers who only consider one type of property may have limited options. To illustrate supply levels, we highlight the availability of different properties, including single-story homes, condos, buildings, and landed homes.
9. Focus on speed
We collect data on how quickly homes that match your style in your ideal neighborhood sell, showing you how quickly the most desirable properties are scooped up. Search for homes that meet the buyer’s square footage and key feature requirements, especially if the buyer’s “must-haves” narrow the range of suitable options.
10. Tell your absorption story
If your client wants to wait in a market where homes are selling faster than they are listed, help them understand how many weeks it takes to replenish inventory and why they should be ready to make an offer when the home they want is listed.
11. See microtrends
Point out the decrease in days on market. This number shows how quickly buyers are purchasing homes. For homebuyers who need to sell their home, this number may be different between their current neighborhood and the area they’re moving to.
12. Consider seasonal timing
People often talk about peak season for buying and selling homes, and that may be true. For example, families with school-age children tend to move in the summer so that their children don’t have to transfer schools mid-year. This seasonal activity can favor buyers who can travel at any time of the year, as fewer buyers means less competition for low inventory.
13. Focus on missed opportunities
It may be helpful to know what happened to the property. Show homebuyers “escape properties” to better understand the pace of the market.
14. Put it on the dashboard
If you have data visualization skills, we can show you these numbers graphically showing market trends, home sales velocity, and potential opportunities. Visual differences can grab the buyer’s attention and provide a clearer picture of what’s happening in the market. Graphics also make confusing data more clear to buyers trying to make the best decision.
How can we support our clients?
The market is changing, but that’s always true of real estate. Buying a home remains the biggest purchase for many people, but it’s about more than just numbers and data. Moving to accommodate a large family or to consolidate a smaller family can be a very emotional decision that many people struggle with.
It’s important to not only listen to your customers’ concerns, but also to help them focus on the home they’re looking for. Ultimately, you want your customers to be happy with their purchase and happy with your support. Let me remind you that in today’s real estate market, you need clarity on price, priorities, and pace.
By providing data support and interpreting numbers, we can help our clients make informed decisions quickly.
