Most Realtors will agree that friends, family members, and acquaintances often ask, “how is the market?”
I believe many do so in an effort to be polite and show interest in our career path while others are genuinely curious and are trying to gather information to create a strategy for their own real estate asset management or to assist a friend or loved one.
Naturally, I try and keep my answer brief, and repeat the question back, as I have found that nearly every homeowner and most prospective homeowners have a strong opinion about what exactly is happening in their market and most are willing to share their thoughts. Those ideas are nearly 100% anecdotal observations and hearsay very rarely supported by facts. They nonetheless may be correct, as many of you are astute and see the big market trends, but without market data I would never feel comfortable propagating those ideas.
As a professional, I try and look at pertinent data as frequently as possible to determine market conditions. Members of the National Association of Realtors have access to their local association’s data that includes key box reports and sales history after deeds are recorded. These two data points represent consumer interest and actual completed transactions in which a Realtor was involved. More than 90% of all transactions in the United States are completed with the help of a Realtor, so in my opinion we are getting a great snapshot of data that can be organized by month, quarter, year, 5 year, or 10 year periods of time to detect market trends.
For instance, this graph depicts the number of pending sales in the month of June 2019 in Jackson County, Oregon reflected in the blue line and the mean number of pending sales averaged over the 6 month period reflected by the red line (provided by Rogue Valley Association of Realtors):
Most casual observers of real estate markets would not be surprised to see that from the time period of January to June activity generally increases in a temperate climate such as southern Oregon.
The question then becomes, “what does this period of time represent in a larger sample?”
The average number of sales over the 6 months is in the neighborhood of 250 homes, so there’s a total volume of nearly 1500 homes that sold in the first half of 2019.
If we compare those numbers to the 2018 year end statistics found in the following graph (also provided by the Rogue Valley Association of Realtors):
We find that we are on target to complete a greater number of transactions in 2019 and that the 5 year change in price is over 45% of increase.
Every licensed broker that joins their local association has access to this data. What I have described here is a very small part of determining market conditions at the various price points that each market contains.
I appreciate those of you that read my words. Generally, my friends and family will often ask, “this is great Matt, but what’s the point?”
My answer: consult a well-trained, intelligent professional to find out what’s happening in the market. Don’t trust a little red or green arrow next to a home report issued by a company that is more interested in advertising revenue than you and the important decisions you are trying to make. It’s fun to talk about the weather at the barber shop, but I don’t plan a trip into the backcountry without checking with NOAA. It’s fun to look at real estate sales data, but please do not make important decisions in your life without consulting a professional you trust. As always, I, Matt Johnson at Keller Williams Southern Oregon, am available to provide a Comparative Market Analysis of your property or prospective purchase. Get the data and make the right decision.