City Lakes November Showings
It’s easy to get overwhelmed by real estate statistics — even for professionals.
For starters, there’s monthly sales data; “pending” sales data (under contract, but not closed); median and average sale prices; number of active listings (inventory), etc.
Those data are available locally, regionally, and nationally.
Further complicating matters: different “scorekeepers” use different formulas.
Case-Shiller, perhaps the best known index, uses a methodology called “matched pairs” to track monthly price changes in the 20 largest metropolitan areas.
By contrast, the National Association of Realtors and various government agencies track more markets nationally, but typically focus on less expensive homes financed with smaller, “conforming” loans (under $417k in most markets).
Some of the foregoing seasonally adjust their data, some don’t.
Finally, the housing market is really two markets: existing and new construction (the former is about 10x larger).
New construction has its own tracking bodies and vocabulary, including “permits issued,” “housing starts,” etc.
No wonder getting an accurate picture of the housing market is like the blind men and the elephant: each one’s take . . . depends on their perspective.
Focus: “Micro,” Raw Numbers
So, how do you cut through all that complexity?
By getting back to basics — specifically, by focusing on raw (vs. seasonally adjusted) data, at the local level.
It doesn’t get any “rawer” or more local than showing statistics.
A “showing” is nothing more than a prospective Buyer — accompanied by their Realtor — viewing a home that’s for sale.
In my experience, only about 10% of first showings ultimately lead to a closed sale. However, if you’re home isn’t getting shown . . . your chances of selling are effectively 0% (my clients all know my line about “if your parents don’t have children, you won’t either”).
In early August, showings for my office, Edina Realty City Lakes, hit a peak for the year at 332. By contrast, the week before Thanksgiving, that number was 94 — a drop of more than 2/3 (Thanksgiving week, it was even lower, at 60 showings).
Parsing the Numbers
What’s the likely explanation?
Early August was when serious Buyers “had to get a move on” to learn the market and close before Nov. 30 — at the time, the deadline for using the $8,000 tax credit.
When the tax credit was extended and expanded a few weeks ago, traffic fell off even more than normally happens in late Fall.
In truth, the drop-off isn’t quite as bad as it looks.
The reason is that Buyers out looking now are typically more serious, whether because of job transfers, expiring leases, etc.
Call it “quality over quantity.”