There is no way to create a strategy to market a home for the most it can possibly sell for in a given market if you don’t understand exactly how that market is behaving. The analytical control freak I am pours over these graphs every month trying to figure out how my sellers can win when so many feel like they are losing right now.
If your home is sitting unsold today, this one is for you.
Take a look at the graph below:
This is the contract ratio graph – it is one of the very best ways to measure demand for home sales because it is the number of homes that buyers have put under contract versus how many homes are not yet sold. In March you can see Phoenix hit a high above 278 – this means that for every 278.6 homes under contract there were only 100 left unsold – buyers were like hungry Pac Men, eating up homes faster than they could go up for sale – this was out of control/abnormal/wild and crazy demand. In 4 short months that number plummeted to 48.9 – so ONLY 48.9 homes under contract versus 100 sitting waiting to be sold – Pac Man appears to be getting full or maybe he’s trying for hot guy summer – either way he’s slowed WAY down.
We went from the hottest market Phoenix has ever seen to barely-warm-maybe-approaching-cold in 4 months – yikes.
Alright Why Should This Matter to You?
The obvious – I know you know high demand/low supply drives prices UP – at least I hope you know this. So when we see this HUGE shift in demand downward then we know prices will and have started to come DOWN – this is outside of anyone’s control.
The less obvious and what we CAN control – This data shows us how difficult it is to hook a buyer in the first place. My intense focus for my sellers right now is GETTING THEM A VIABLE BUYER who is willing to pick their home over the growing other options to write an offer on. This is the heavy lifting. So, if you’re my client now or about to be, this is how you can help me be successful:
1. Don’t get pissed about me needing access – when I come to you with some interested buyers who want to view the property, please be flexible with me. To be clear, I no longer recommend daily showings for my sellers even if their home is vacant (I can share why if you’re curious – another convo for another day), but I will need to get buyers into your home at some point and need that to be a priority for you. When they do come through, please be sure your home is show ready and pets are away. You need to leave your home for showings, why? because no one likes a lurker, don’t make it weird. I’ll do everything I can to make it worth your while and gas.
2. Don’t take offers for granted – When we do get that offer, we need to be very careful about how we respond. We should not push back over trivial things. We should ask ourselves… “is an additional $5,000 or a washer/dryer worth us losing this buyer and staying on market longer as demand continues to drop which may possibly cost me more in the long run?” The big win here is getting a buyer to commit and make a fair offer for your property – don’t be penny wise pound foolish.
3. Expect Repairs/Credits – When the buyer requests repairs, and they def will, we need to be sure we are wise in our responses. You may not agree but at the end of the day, big picture thinkers and creative solutions make the buyer feel better and get you paid which is all that matters at the end of the day. Ego over home condition kills too many deals. Win-Win is the way to stay in deals.
4. Be The Next In Line – If we are on market and getting no requests to show or offers, this means that the price isn’t attractive enough to be the next home sold. And in a market like this, when Pac Man is losing his appetite, you want to be on his fork not getting cold on his plate.
Although no one can predict for sure how long this shift will last, so far there is very little to think that the trajectory will change anytime soon. This isn’t a doom and gloom message, it’s simply information that anyone interested in getting the very best result out of today’s market will need when making decisions. If you are thinking about selling, I am glad to get into specifics for your neighborhood INFORMATION IS POWER – just ask 602.696.7859