How to Keep Up with The Market Changes
Summary
How do you stay up to date with the market as a real estate agent?
To become a real estate market expert, you need to update and keep track of these 12 weekly statistics.
- New Listings.
- Active Listings
- New Pendings
- Expired and Cancelled Listings
- Off-Market and Withdrawn Listings
- Closings
- Average days on the market
- Average list price
- Average sale price
- List price to sale price ratio
- Price reductions
- How many weeks of inventory
Doing this weekly (and consistently!) allows you to see the trends faster and helps you stay on top of what’s happening in your entire market metro area.
When you understand what’s happening in the market, you can best guide your prospects or clients in making decisions. Because you’re a real estate market expert, they will want to work with you.
You can download the free weekly tracker spreadsheet here https://yesmasters.com/marketstats
If you want more advanced training on this, join me for our upcoming 3-day live virtual event Agent Mastery Live Virtual 2020. Get your early bird ticket here https://www.agentmasterylive.com/
Full Transcript
The question of the week is, How do you keep up with the market changes as a real estate agent? And a great question it is. It’s actually a question from Ashley Moore that she commented on a previous, earlier YouTube video that I did recently on how to… The market forecast and what’s happening. I’ll put the link to that video below. But here’s her question. How do you watch the market changes? News, MLS. How do you stay up-to-date as a new agent?
Well, it’s a great question, and it doesn’t matter whether you’re a new agent or a seasoned agent, you have to know what’s happening in your market. Because of the times, and because of the uncertainty, because of the questions people have, and they’re debating on, “Do I buy now? Do I not buy now? Should I sell now? Should I not sell now? Do we wait? What do we do? What’s happening in the real estate market?”
Because there is so much turmoil, there’s so much conversation, there’s so much uncertainty, now, more than ever, your expertise is what people need. They do not need information from you. What they need is expertise from you. So, you have to understand not only what’s happening, but what to do about what is happening. If you’re wanting a lot of that, if you’re really wanting to get advanced on this, learn the strategies and everything like that, it’s way beyond the scope of this video. Come join me at Agent Mastery Live, our upcoming three-day virtual event. Go to https://www.agentmasterylive.com/ to check it out. But if you’re wanting to understand, how do you keep up with market changes, this video, I’m going to tell you exactly how to do that and how to become a market expert or what I call “the real estate economist” in your market.
Now, there are two types of statistics that you want to pay attention to. One is the macro economy, the macro market, which is the broader market. That becomes the whole United States, the global economy, the national economy, state economies, and all of that. That’s more of a macro look at what’s happening around. What’s happening all over the place. And to keep up with market changes, and statistics, and what’s happening like that, there’s all kinds of resources that you can go to from NAR statistics, to keeping current matters, to Zillow, to Inman News, and on, and on, and on.
However, for micro statistics, to know what’s happening in your market, in your backyard, in your home, for your prospects, for your clients, for your people, you want to pay attention to the micro statistics. What is happening in your market? If somebody is thinking about selling, how is what’s happening right now going to affect the sale of their house, and how much their house is worth? How much can they expect to sell for? How long is going to take, and so forth? That is a micro look, and the best source for that is your local MLS, your local multiple listing service. Now, there are different softwares like BrokerMetrics and stuff where they can do more deep dive into it.
But I’m going to share with you a very simple way that you, every week, can track what’s happening in your market. And if you’ll do this consistently, it will turn you into a market expert or the real estate economist in your city for all of your clients, your leads, your prospects, and so forth. So, here’s what you want to do.
You want to update and keep track of 12 weekly statistics.
Now, this is very, very important. One, you got to track the statistics weekly. Every single week, not monthly, every single week. Why? Because things are changing fast right now. And when things are changing fast, if I track the statistics monthly, it takes six months to really get six data points so that I can see a trend. Three months, I only have three data points. But if I’m tracking it weekly, in three months, instead of having three data points, I have 12 data points. Okay? So, I can watch a trend and I can see things happening more quickly than if I’m tracking it monthly.
So, number one is you want to track statistics every single week, and I’m going to give you 12 statistics that I want you to track every single week, and I’m going to actually give you today a downloadable spreadsheet that you can download, and just all you gotta do is pull the stats on your MLS and you plug them in.
So, it’s a really simple process. I’ll put the link down below. You can download. You can go to yesmasters.com/marketstats, and you can download this free spreadsheet that simply is a one-year weekly tracker, and you just put the numbers in for that week. You can start where you are, put the numbers in, and it’s going to start tracking these numbers for you, and so, you can see trends.
Here are the 12 weekly statistics that you’re going to track.
1. NEW LISTINGS. How many new listings came on the market in the last week?
2. TOTAL ACTIVE LISTINGS on the market right now. How many total active listings are in the market? What is the active inventory right now?
3. NEW PENDINGS. How many new pending sales? How many properties went under contract in the last week? This lets you see how fast homes are selling.
4. EXPIRED & CANCELED LISTINGS. In other words, how many listings went off the market, and the listing agreement with that agent did not sell? Done, off. So, expired and canceled listings. And then, the next one is similar to that, but it’s your
5. OFF-MARKET & WITHDRAWN LISTINGS which means they’re probably still with the same agent, but they just pulled it off the market. Between your expired and canceled listings, which is one column, and then, your off market, temporarily off-market, and withdrawn, properties that have been taken off the market for whatever reason, that lets you see what’s happening on the back end of people putting their homes on the market.
Are they selling, new pendings, or are they coming out? How many of them are actually just being pulled off the market? Either because the agent failed, sellers changed their mind, sellers are waiting, whatever it is, we don’t know, but we’re tracking that.
6. NUMBER OF CLOSINGS that happened this last week. Are you doing this week to week? And you got to do the same day every single week. So, you want to do it every Sunday afternoon, or every Sunday night, or every Monday, or every Friday, whenever you want to do it. But consistency is the key here. You just put it in your calendar. Every week, I’m going to spend about 30 minutes going through and pulling these statistics. It will not take you that long once you get used to doing it. But it’s important that you do it every week so that you’re staying on top of what is actually happening.
So, this is a great, consistent habit so that every week, I’m staying on top of what’s happening on the market, and every week, because I put it in the spreadsheet, I’m seeing the trends. I’m seeing, are there more listings coming to the market now? Is inventory going up? If there’s more listings coming on, but inventory is going down, or staying the same, that means what’s coming on is still selling. Average days on the market, I’m going to get to those. Let me get to the rest of the stats here.
7. AVERAGE DAYS ON THE MARKET. What are the average days on the market?
8. AVERAGE LIST PRICE
9. AVERAGE SALE PRICE which means the actual price it sold for. So, average list price, average sales price.
10. LIST PRICE TO SALE PRICE RATIO. You take the list price divided by the sales price, and that gives you a list price to sales price ratio.
11. PRICE REDUCTIONS. How many price reductions happened in the last week? Now, this is a symbol of how people are thinking. Are they getting desperate? Are homes not selling, and they’re getting frustrated, so they’re reducing the price? How many price reductions did we have in the last week?
12. WEEKS OF INVENTORY. How many weeks of inventory are there? And these are formulas in the spreadsheet that we have built in for you so that the list price, sale price ratio, that’s built in for you automatically in the spreadsheet that you’re going to download, for that free download.
And the how many weeks inventory, that formula will be built in so when you put it in the other data points, it will automatically calculate that for you, so that you’ll do it. And then, at the very end of it, it is going to have the weekly… At the very end of the spreadsheet, it’s going to have the year-to-date weekly average for each of these data sets.
If you start tracking that, then every week, I can watch what’s happening, the average days on the market? What’s happening, average list price? Average list price, sell price ratio. Is that changing? How many price reductions are happening? What is the total week, how many weeks of inventory do we have on the market? Is it going up? Is it going down? Are the total Actives going up? Are they going down? And it will allow you to see so whenever a buyer asks, “What’s happening?” Or sellers ask, “What’s happening in the market?” Average days on the market are going up. Home prices are starting to drop. The sales prices are starting to drop. More price reductions, more expires, whatever is happening.
When you see some of the big things are going to be happening, when you see a flood of inventory, and all of a sudden, you see a bunch of new listings coming on the market, and then, inventory starts going up, you know something is happening. Supply is going up, and if total active listings is going up, supply is going up. That means there’s not a demand to keep those properties coming on. Properties are selling. When they’re not selling as fast, now, you got a problem of increased supply. Prices are going to start dropping. That’s bad for sellers, good for buyers. These are the kind of things that you want to be watching and make sure you’re doing this every week because weekly lets you see the trends faster.
Now, a couple of recommendations that I make. One is that you do this in your entire market metro area. So, if you live in a big city, I want to just do the whole thing. I live in Los Angeles, so I want to do the entire LA metro area. Now, I’m not doing the entire MLS because our entire MLS covers almost all of Southern California, which is way too big of a market. You can, but it’s going to give you more of a macro look than the micro. Los Angeles, what’s happening in the greater Los Angeles area. I’m not going to include areas that are in the high desert just because it’s a totally different world than the city of Los Angeles.
But again, your market depends on what it is. If you live in Dallas, Fort Worth, where I sold real estate, you might do all of DFW, and then, whatever is your core market area. So, I’m in Los Angeles, but I live in the South Bay of Los Angeles, California. That South Bay has about 10 or 12 cities, and that would be what I would consider my core market if I was actively selling today. So, I’m going to do more of a micro look at just what’s happening in the South Bay. Now, you can also do it by an actual individual, a little city or community. If you want to do that, you can do as many of these as you want to, get as complicated, as granular as you want to get.
But the most important thing is that you’re doing this weekly and consistently whether you’re doing it in one market area or you’re doing it, breaking it down where you’re doing 10 of these a week, whatever you decide to do is fine as long as it is consistent so it will actually help you understand the market, have more expertise so you can give better information and better guidance to your clients, to your prospects that are making decisions about what is best for them. When you have that kind of information, when you have that kind of knowledge on the tip of your tongue, you have that kind of expertise, and you can share with them exactly what you’re doing, people will always want to work with you.
So, get your free download. The link, again, is down below, yesmasters.com/marketstats. If you want more training on how do you use market stats? How do you use what’s happening in the market, and strategies, and skills, then join me for our upcoming three-day live virtual event. Agent Mastery Live, go to https://www.agentmasterylive.com/. Get your early bird tickets right now. As I’m recording this, as this is being published, you’ve got early bird tickets still available. Make sure you get on that as quickly as possible. Get this download. It’s free. You can start using it right away, and learn and understand what’s happening in your market, and you’ll always be able to expect YES!