What are Market Ratios ~ and why should you care?

allison@alkihomes.com — Tue, 28 Feb 2006 08:00:00 GMT

I'll begin by admitting that Business Statistics class was not the high point of my college career ~ which makes it even more ironic that analyzation of market statistics is a key part of my coaching and planning sessions with clients looking to buy or sell a home. You've probably heard the terms "buyer's market" and "seller's market" ~ usually in the same conversation as the "B" word (bubble) ~ but what do these terms actually mean in a practical sense? Simply put, a buyer's market means the advantage favors the buyer: there is high inventory of homes in relation to the number of buyers, a good inventory selection fo buyers to choose from, and a low number of sales in relation to total listings. A seller's market favors the seller: there is low inventory for buyers to choose from, and sales are high with quick market time. A balanced market ratio means that neither the buyer or seller has a clear market advantage. The market ratios, however, change DAILY, they differ by PRICE RANGE, and by AREA/LOCATION, among other things. Here is where an agent who is in tune with the shifting economics of the market can be a terrific asset to you!

I track market data on a weekly basis in $50,000 price range increments. In the West Seattle market, for example, the overall market ratio favors the seller and even more so in the weeks following the Super Bowl (if you wanted to maximize your buying odds, Super Bowl weekend would have been a good time to do so!) However, there are pockets in certain price ranges where the ratios give a clear advantage to the buyer. Understanding the statistics and developing your strategies accordingly will give you more power as a buyer and greatly increase your odds of success. And when everyone else is still standing around the water cooler talking about the "bubble", you'll be jingling your new house keys and laughing all the way to the bank!

A Tale of Two Homes ~ Or, Can You Feel "It"?

allison@alkihomes.com — Sun, 29 Jan 2006 08:00:00 GMT

Two homes piqued my attention this week ~ both situated in premier locations along the West Seattle waterfront, and both masterfully interpreted examples of modern architectural design and commanding substantial sound views. Architectural preferences aside, the difference between these two stunning homes is that one is the “It” girl, overflowing with the energy and life of a debutante, the other a “wallflower” all dressed up for the party that never appeared. Home #1 was introduced to the market earlier this week, combining a price point selected with laser beam precision with a Madison Avenue-worthy marketing campaign. Unveiled to the oohs and aahs of a rapt and captive audience (borne out by the stack of agent’s business cards on the kitchen counter), this home actually made my heart rate rise as I approached and entered. “And the Golden Globe goes to…!!”

On the other hand, Home #2, while enjoying a far more sweeping and unblockable sound view, has languished on the market for over a year. This remarkable home, with an original asking price far beyond the market value, was never given a proper debut into the marketplace to the acclaim worthy of its architectural design and vision, but was allowed to limp onstage weighed down by a hugely inflated price tag and accompanied by no marketing hoo-haa whatsoever. After more than a year and one small price reduction later, the reaction of curious passers-by (and even serious shoppers) is similar to that when perusing the designer clearance table at Nordstrom ~ “Oh, it’s lovely! But it’s been hanging here so long! There must be something wrong with it! It must need to be marked down A LOT MORE!” Sorry, ratings down, season canceled!

My point here, as I try not to mix metaphors, is that the energy and life of a newly listed home dissipates after the first two to three weeks on the market. Harness the energy of a precisely honed and executed listing plan for your home, one which encompasses preparation, pricing, and presentation. And let the show begin!

Allison's Insights

What are Market Ratios ~ and why should you care?

A Tale of Two Homes ~ Or, Can You Feel "It"?