Sales Price – This one may seem straight forward, but the average sales price in most zip codes doesn’t give you a clear idea of what you’re home should sell for. It just tells you what the average-priced homes have sold for. I doubt your home is average so the home must be evaluated and comparable sales (comps) must be used to evaluate the price further.
Original List Price – There are only two factors you can change with a home when you’re selling it. The finishes/condition and price. You definitely can’t change the location. Contrasting the original list price with the ultimate sales price will show you how much people overprice their homes when they sell them. This delta helps explain the next topic, market time.
Market Time – When a home is priced right, market time is low, when it’s priced too high, it sits. This is true for competitive markets, but markets with a lot of inventory will depress sales and increase the market time. Buyers have differing views of what market time means; every market is different. In some areas, buyers expect to see long times because they think the property has sat long enough so they can get a deal. Sometimes buyers think there is something with the property and aren’t interested in seeing it because of the market time. I think this reality of stigma is the most frequent example I experience. Amassed market time is a friend to no seller and is a cardinal sin of selling real estate.
% of Last List (Closed) – Here’s some great industry-speak for you…🙄This is translated to The Final List Price as a Percentage of The Final Sales Price. You might think this will tell you how off the home was priced, BUT it actually only tells you how off it was priced based on the most recent list price. The home could have started at any number above that. In short, you can use this percentage as an expectation of what you’ll actually receive. If you list at $1,000,000 and this percentage is 95%, you can expect the home to sell for $950,000.
% of Original List (Closed) – Translation – Final List Price as a Percentage of The Final Sales Price. This is what I was hinting at above. This one will actually give you an accurate view of how far off homes are priced, to begin with, OR how much people negotiate or expect to take off the top of the price. Keep in mind, for homes that are priced to sell, this number is often over 100%.
Contract to close – This one is straight forward. How many days between when the property is put under contract and when the property closes. This could be fudged a few days in either direction based on the tenacity of the broker to get it updated in the MLS, but in general, it can be taken at face value.
Listing to Contract – How many days will the property sit on the market before it receives a contract. This number can be taken as gospel in some areas, like those mentioned above where a property needs to sit on the market in order for buyers to know it’s at a true low, but in many markets, this number doesn’t mean anything as the market time is reset every time there is a price reduction. Every broker does it differently, but this number is often manipulated and needs to be taken with a grain of salt.
Months Supply – Finally a stat that needs no interpretation or back story. This number is calculated by dividing the total number of homes for sale by the number of homes sold in one month. So if you look at homes and notice that 30 are for sale and 10 sold last month, there is a 3 month supply of homes. Months supply of homes is the opposite of the absorption rate, which is how fast homes are sold. 6 months of supply is considered healthy in most markets, but it varies from neighborhood to neighborhood. At the time of writing it is 19.8 months in the Gold Coast and 8 in Lincoln Park for Single Family Homes.
New Listings – Sellers can use this to see how much competition comes on the market each month while buyers can use this to set their expectations of new homes to hit the market every month.
Under Contract – Homes under contract. This number is typically higher in the Spring than at any other time of year.
Closed Sales – This tells you what time of year the most homes are closing. This can be used as an indicator of whether to hold off and wait a few months to sell, or to get on the market immediately.
Price Per Sq Ft – This number is flawed in Chicago. Most new construction is listed as “0” for square feet because square feet can be measured in more than one way. Further, the reported information is only as good as the person inputting it so a human error or an agent wanting to state a unit is larger than it is, regardless of the potential problems that may bring to them and their seller, are all culprits. Use this number as a guide, but not as an absolute.
Dollar Volume – The total dollar amount of homes being sold every month. This number accounts for all on market transactions reported on the MLS. It is an accurate figure you can bet on.
Shows to Contract – The number of showings performed until there is a contract. I wish, I wish, I wish this number could be relied upon and with every year that passes, it gets more accurate, but this video will explain why it’s not.
Showings Per Listing – This is the same as the last one. It would be a great number to know, but because not all agents are using the best tools available to us, the sample size is likely smaller than it needs to be, and therefore the information cannot be relied upon.
Homes for Sale – How many homes are for sale each month.