Buying a home can feel intimidating in today’s market. Some buyers hesitate because of high mortgage rates, especially the 35 percent of homeowners who locked in rates below 6 percent during the historic lows of the pandemic. In the years since then, those homeowners may have outgrown their homes or want to downsize, but the dramatic market shifts make moving feel impractical.
For seasoned homeowners and first-time buyers alike, navigating the market’s unpredictable conditions can feel discouraging. In some markets, homes sit without offers for months, while in others, they are gone in a week.
This can be particularly frustrating for first-time buyers who are trying to determine where they can break into such a difficult and expensive market.
If this sounds like your client, local inventory data is a tool you can use to help first-time and veteran home buyers find a home that fits their needs.
14 tips for using local inventory data to motivate buyers
Here are 14 ways to use the data to help your clients find a home.
1. Highlight shrinking options
In such a volatile marketplace, it can be challenging to predict the future, so why not look to the past? Compare current active listings with those from previous months to illustrate a market where, even though inventory levels are up year over year, growth is slowing.
2. Put a number on it
Use the data you find from previous months to show how many buyers are competing for each home. Homes that are under contract in under three months mean the market is hot, and competition is fierce. This days-on-market snapshot creates urgency that motivates buyers to get in and make a deal.
3. Compare new listing with sold homes
Use the tools at your disposal to analyze how many homes are selling versus how many are for sale. When the first number is larger than the second, help your buyers understand that the pace is picking up and they will need to move quickly.
4. Compare the list price with the sale price
Show home buyers the most recent average list-to-sale-price ratio, which indicates how much was asked and the percentage of that price that made it onto the closing sheet. In areas where the ratio is over 100 percent, waiting might mean paying more for the same type of property later on.
5. Track back-on-market frequency
Track how rarely homes come back on the market. If very few deals fall through, it shows buyers are committing, and second chances on most homes are uncommon.
6. Drill down on neighborhoods
A city’s real estate market might seem balanced, but take a closer look at the neighborhoods your clients want. There may be neighborhood-specific scarcity that prompts buyers to accelerate their decision-making. This hyperlocal expertise matters to consumers. In fact, 75 percent of buyers and sellers rate it very or extremely valuable that their agent has local market and neighborhood-specific knowledge.
7. Look closer at home price bands
First-time and veteran buyers have budgets, and it’s crucial to gather data for their specific price bands. Depending on the market, some price bands may be scarcer than others. Homes priced slightly below or above the region’s median price face more competition and tend to sell more consistently, while pricier listings sell more slowly because of the smaller pool of qualified buyers.
8. Examine property types
Buyers who look only at specific property types may limit their options. Highlight the availability of different properties — such as one-story homes, condos, fixer-uppers and homes with land — to illustrate supply levels.
9. Focus on speed
Gather data on how quickly homes matching their preferred style in their ideal neighborhood are selling to show how quickly the most desirable properties get scooped up. Specifically, search for homes that match buyers’ square footage and key features requirements, particularly if their “must-haves” narrow the range of suitable options.
10. Tell the absorption rate story
If your client wants to wait in a market where homes are selling faster than homes are being listed, help them understand how many weeks it would take to replenish inventory and why they’ll need to be ready to make an offer when the home they want is listed.
11. Look at microtrends
Point out decreases in days on market. This number illustrates how quickly buyers are purchasing homes. For home buyers who also need to sell their home, this number might differ between their current neighborhood and the one they want to move to.
12. Consider seasonal timing
There’s a lot of talk about the peak season for homebuying and selling, and this can certainly be true. For example, families with school-age children tend to move in the summer so their kids don’t have to change schools in the middle of the year. This seasonal activity may favor buyers who can move at any time of year because fewer buyers means less competition for low inventory.
13. Zero in on missed opportunities
It can be helpful to see what could have been in real estate. Show home buyers “the ones that got away” so they can further appreciate the pace of the market.
14. Put it in a dashboard
If you have skills in data visualization, present these numbers in a chart that graphically demonstrates market trends, the speed of home sales and potential opportunities. The visual distinction grabs buyers’ attention and can more clearly illustrate what’s happening in their market. Graphics also make confusing data clearer for buyers trying to make the best decision.
How you can help your clients
The market is shifting, but that is always the case with real estate. Buying a home remains the single largest purchase for many people, but it’s more than just numbers and data. Moving to accommodate a larger family or to consolidate a smaller one can be a deeply emotional decision, and many people struggle to make it.
It’s critical that you not only listen to your clients’ concerns but also help them focus on the house they are looking for. Ultimately, you want your clients to be pleased with their purchase and happy with your assistance. Remind them that in today’s real estate market, they will need to be clear on their price, priorities and pace.
By providing data support and interpreting the numbers, you can help your clients make a speedy, informed decision.
Luke Babich is the CEO of Clever Real Estate in St. Louis. Connect with him on Facebook or Twitter.
