New Technology Lets Realtors
Hone in on “Micro Markets”
Investors are fond of saying “it’s not a stock market, it’s a market of stocks.” By the same token, I think of the housing market not in terms of overly broad, market-wide statistics — which can mask a great deal of variation between neighborhoods — but as an aggregation of dozens of micro markets.
Thanks to advances in the Multiple Listing Service (“MLS”) mapping features, realtors can now capture what’s happening in each of these “micro markets” with startling accuracy and precision.
Just to pick one example (there are dozens), the neighborhoods just west and south of Cedar Lake in Minneapolis have really had some nice appreciation the last five years. The lots are big, location is great, and there are a lot of well-built ’50’s ramblers that, because they need a lot of updating, are relatively cheap.
So demand has been pretty strong (it’s also the market I live in and have done a lot of deals). Once you get within a block or so of Cedar Lake, the land alone can be worth high six figures.
On MLS, the aforementioned Cedar Lake area straddles Minneapolis and St. Louis Park, and areas 300 and 391. Searching only by city or MLS area or gives you a very different — and overbroad — market picture.
Using the MLS mapping tool, I can basically draw an L-shaped map hugging Cedar Lake and generate my own, custom (and much truer) market statistics. These include average selling price per square foot, average days on the market, price trends, inventory trends, etc.
Armed with these numbers, I can leave the headlines behind, and tell clients what’s really going on in the corner of the market that matters to them most.