By Leon Y. d'Ancona, B.T.L., M.T.L., RRESI
In this slow market don't be fooled into thinking that all homes move at the same pace. By Understanding your "merchandise", your bottom line will remain healthy. Here is how:1) Classifying your entire MLS as one is like saying, "I'll have the menu" in a restaurant.
At minimum the real estate professional needs know which segment of the market is moving and what value share starter, move up and luxury homes represent.
Value ranges for homes in the city of Chicago, April 30 (last 12 months)
A perfect rule of thumb that I developed over 21 years is that starter homes values are the first 60%of homes that sold, move up are the next 25% and luxury represents the last 15 %. Curiously these ratios did not change much over the last year, which allows for some longer range planning.
Remembering that we are a commission based industry it makes sense to concentrate on what is moving, rather than stoically defending your Alamo, because that it where and what you have been doing in the past.
2) We all preach "location location location" yet few of us practice it. Look at the same graphs for Naperville, the next largest city.
Value ranges for homes in the city of Naperville, April 30 (last 12 months)
The ratios are completely different. The point I make is that you must adapt your listing and selling strategies in tune to market conditions to capitalize on opportunities more that more than 95% of all real estate professionals ignore. To do that you need to know market conditions precisely and timely.
While these are likely the most difficult real estate times I can remember in the last 21 years, this is just one of the many tools that found in REality® that lets you find the good in a market others call bad.
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