What is the meaning of measuring market intensity and why does it matter?
Market intensity is an interesting way to look at the market. I was given this idea by my friend, Lennox Scott. So when we look at market intensity, the way we measure it is by how fast listings are going pending the first 30 days they hit the market. So if we go back in time and look a year ago in a lot of markets across the country, when you look at how many listings were going pending in the first 30 days, it was like 80%, 85%, 90% of listings were going pending at that point.
Fast forward to today: What's that market intensity reading? I'll tell you what mine is. For the last two weeks, in my local market that number is 60%. 60% of listings are going pending in the first 30 days.
It's still a high number. It's a lot, but it's not 80%. It's not 85%.
So that market intensity comes down a few notches, and that's the conversation we need to be having with sellers when we're sitting down and saying,
"Let me show you a really interesting measurement. We were in a frenzy market a year ago, two years ago because of COVID stimulus. The Fed kept interest rates artificially low, and they've pumped tens of billions of dollars into the market by buying mortgage back securities. They've taken all of that out. Now, they're selling off their mortgage back securities. And they're raising interest rates. So what's happening is we're not getting that stimulus. So we're going back to a kind of a pre-COVID market. And because of that, we're moving away from 85, 90% of listings selling in the first 30 days. Back down to a more normal, healthy pre COVID market, which is more like 60%. 60% still a big number, but which of these listings are selling?
"What I've done for you is I've done a complete survey of every listing that's sold in the last 30 days that's in your price range. And I've looked at what they do to get sold? Because this is the most important thing, 60% are selling, but 40% are not. We do not wanna be a part of that 40% group, because what happens then is your home can become stigmatized. It can take longer to sell. We're gonna have to do a lot of price reductions to get you sold to reinvigorate the market. We want to study what it is that these people are doing over here to get their home sold and sold fast. So let's have that conversation."
So we bring into the conversation this idea of market intensity, being a couple notches down. It's still a great market, but we're gonna have to really strategize how we get the home sold.
I hope that helps you in your conversations with your sellers.
I know that those conversations are changing. Price is the number one marketing tool we have. We wanna make sure that we don't get talked into listing a home that's way overpriced, because we're gonna end up carrying that. And the seller's gonna look at us and say, why didn't you get it sold?
We wanna be the influencer here. We wanna be talking to people about what it's gonna take to get their home sold effectively. So it's not just about taking a listing. It's about taking a saleable listing. Two different animals, right?
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