Weekly meetings at our company are entertaining, enlightening and insightful. This week we tried to get through all the housekeeping rather quickly so that we could talk specifically about the changing market conditions. Talking to a roomful of 40 or 50 agents naturally leads to many different opinions, but for the most part, they were all saying the same thing; Things are balancing out. Surprisingly, all our agents are feeling positive. For many of their clients the changing market means that buyers can spend more than 10 minutes in a house before deciding to pay tens of thousands of dollars over asking. We all agree there is some element of buyer fatigue out there.
Obviously interest rates play a big part in the changing housing market. Rates change because the brains at the central bank collect and disseminate information each quarter on everything from inflation to job creation or loss. The Euro Zone fragility and slow growth in the US economy play huge roles as well. For the most part, a move on rate hikes or decreases come after a pattern is established which means that things have already changed significantly when the decisions are made.
In our real estate office we have, at our finger tips, tons of information on buying habits and the health of the real estate market. Seasonality notwithstanding, the increase in listings, or standing inventory, tells an obvious tale, and of course, tracking the number of sales month over month and year over year is very important. We like to also track how many sales are over asking price, at asking or under asking. More than the standard tracking of sales to listing ratios, we look at as many as ten other factors all of which give us a clear picture of the overall health of the real estate market in Toronto. This information is reviewed week to week.
A big part of real estate is statistics and numbers. The information we collect not only helps us, as managers, to plan for the future, it also helps our agents adapt their marketing strategies. We are happy to share our information if it means our agents have a leg up on the competition. Starbucks utilizes similar statistical research to determine exact, hour by hour, staffing requirements. Ultimately the more you know about your market the better. There is truly no depth to how much information you can learn about the market and your clientele. The information we mine is not typically available to the guy who decides to sell a house himself or the discount broker looking to make a quick buck, so essentially they are lacking a proper and accurate view of market conditions.
With the flip of a few switches, Lone Wolf, the standard in real estate software programs, can provide a great deal of data, but your brokerage office must be prepared to dig deeper. Think about what you could do with other information such as the demographic of your clientele. How much power would you have if you knew with reasonable accuracy that a first time condo buyer is statistically likely to move in year 4 or 5? Obviously it is up to your sales force to stay connected to their clients to take advantage of repeat business and agent software, like Top Producer, can help agents do that, but think about how useful this information can be to brokerages in forecasting simple things like strategic marketing campaigns. Privacy issues come into play so it is important to know when or if you are crossing the line but tracking and forecasting on a micro level must be a high priority. Ultimately, statistics define where you go and how to adapt your strategy to get there ahead of the competition.
This blog does not necessarily represent the views of Bosley Real Estate.