Merriam-Webster Dictionary defines a geek as: 1 ) A carnival performer often billed as a wild man whose act usually includes biting the heads off a live chicken or snake; 2) A person often of an intellectual bent who is disliked; 3) An enthusiast or expert especially in a technological field or activity. I can proudly declare, “I am a geek!”, but not of the first type described. However, I AM of the category of the second. Especially when a seller doesn’t particularly agree with the value I have given them concerning their home.
The exciting news is—YOU can be the third type! It is possible for anyone to become an expert in the field or activity of evaluating home value as long as you are using the right tools and information. Here are some basic tips to get started in becoming a housing market geek:
1) Absorption Rate. Housing industry experts chart the ratio of homes entering the market to the ratio of homes leaving the market. Think of the ratio as the water line in a bath tub. If the water line is high at seven months or more, the market is experiencing a buyer’s market. If the water line is low, at five months or less, the market is in a seller’s market. Ridgecrest is presently in a seller’s market with 4.34 months of inventory. Some buyers are having a hard time finding a suitable home, and the most attractive and well priced homes are selling rather quickly.
2) Days on the Market. Another way to gauge the pace of the housing market is to track the number of days a home hits the MLS to the day it finally closes escrow. Using the bathtub illustration above, this important data will track how fast the water is moving in the spout and out the drain. The fewer days homes stay on the market, the quicker the home market is moving in a particular location. Some cities in California, such as Oakland and Stockton, are experiencing less than 30 days on the market. Ridgecrest is presently at 107 days on the market based upon the past 90 day average.
3) Median Home Price. This figure is derived by taking the highest priced home sold, and the lowest price home sold in a particular time frame, and finding the middle price point between the two. Think of this as a strong river current, which is flowing midstream where a river runs the swiftest and deepest. The median price tells us the price point of where buyers are purchasing, and sellers are selling. It also gauges the affordability index of buyers during a particular period of time. Media outlets often quote the median home price when discussing value. Keep in mind that this figure can change drastically from month to month as is the case here locally in Ridgecrest.
Join me and let's study the market together! Subscribe to my daily email, Beat Other Buyers. It will keep you in touch and totally informed with the market. Housing statistics and charts are updated monthly on my website as well.
Give me a call, Clint Freeman, at (760) 382-1082, and let's talk further about what it takes for you to become a housing market geek!