September 13, 2021

San Diego Realtor Kurt Strauss walks you through the leading indicators to look at to assess how the San Diego Housing Market is doing.

Looking at the Leading Indicators to Assess the Market

Hi there, it's Kurt Strauss for Whistle Realty Group. As a realtor I often got asked the question, what is the market like? Or how is the market? Well much like when you walk into your doctor's office, they want to do three things right away to kind of figure out how's your health.

They take your blood pressure. They want to take your temperature. They want to take your weight. Those three things as a professional realtor is something that we're going to do to kind of assess where the market is for you.

Days on Market

The first thing we're going to look at is the inventory, we're going to look at the days on market, and then we're going to look at the list price to soul price ratio. And that's going to give us an overall view of how the market is for you and in your world. So let's dive into that right now.

The number one thing is, is inventory. I want you to imagine inventory is, we view in terms of months, how many months of homes are on the market. Imagine a faucet opened up, pouring out houses on the market. If we turn that faucet off, no new houses on the market, it'll take so many months of inventory till everything sold out. In a good market, we're looking at our healthy market. We're looking at six months of inventory.

That means if we turn off that faucet in six months, all those houses are sold and there's nothing available to buy. In San Diego, when things got really crazy, we had less than a month of inventory on market. Meaning if nobody put a house on the market within less than 30 days, there would be nothing available to buy. So that caused the market to spike quite a bit is that low inventory. There's the first indicator we're going to look at.

Inventory

The second indicator we're going to look at is related to inventory, and that's days on market. How many days does it take to sell a house in the market? We're going to take a look at your specific area and see, is it taking 30 days? Is it taking 60 days? How many days does it take for an average house to sell? In some markets in San Diego, a few months back, it got really crazy.

We have average days on market at seven days. Houses were selling really quick, people were getting into bidding wars. We're going to take a look at days on market. The final analysis we're going to do as our introduction foundational analysis is list price to sole price. That means when people list the house and put it on the market, what are they actually selling it for?

If they put it at a million dollars and they get only $900,000, that's a 90% list price to sole price ratio. If we want to take that a step further in a really hot market, we put it up for a million dollars. It sells for 1 million, 100,000, that's 110% list to solve price. That's an indicator, we're going to take a look at to see where the health of the market is. We like to think in the high nineties, that's a pretty healthy market. If we're getting over hundred percent or even at hundred percent, we know bidding wars are happening in that market.

We have a very hypermarket and we want to account for that when we're putting a property are making decisions so that you can maximize the amount of money in your pocket. This is Kurt Strauss. Give me a call 858-775-2181. And we can talk about houses and the market for your specific area. Thank you.

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