I’ll be using local (Calgary) data in this post. However, it’s not the data itself that is important, but rather how and why you should gather and demonstrate this critical information to your clients. You can easily do this in a few minutes, no matter where you are.
We’ve had a wild market here for some time, but I’ve been feeling lately like it’s not quite as crazy as it was. So the question is, “Have we passed the peak?”
It’s entirely valid that an experienced and skilled Real Agent will develop a sixth sense about the market. But when the public is saturated with news about how insane the market is, it’s hard to convince them of a contrarian viewpoint just because you “feel” a certain way.
You want people to make good decisions? Give them good data. The monthly sales numbers are good. But what’s better than monthly data?
So, here are the weekly sales (since Feb 1) for detached homes in Calgary, which I just pulled from our system in less than five minutes:
Date Range | # Sales
Feb 1-7 | 404
Feb 8-14 | 499
Feb 15-21 | 480
Feb 22-28 | 518
Mar 1-7 | 547
Mar 8-14 | 505
Mar 15-21 | 523
Mar 22-28 | 486
Mar 29-Apr 4 | 453
Apr 5-11 | 424
Apr 12-18 | 394
So, there you have it; we are indeed well past the peak of the market. The numbers prove it.
This doesn’t mean the market is likely to change radically. On the contrary, there is still plenty of pent-up demand, so I believe the market will remain strong for some time.
But it’s essential to understand when a market is shifting and contemplate possible explanations, such as:
1. Some buyers have given up.
Prices have risen dramatically to the point that some buyers can no longer afford to buy what they want. Others have lost out on so many multiple offers that they’ve given up out of sheer frustration.
2. Remaining buyers are more conservative.
Most of the “gun-slinger” buyers—those willing to write unconditional offers far over asking—have already bought. The remaining buyers are more patient and willing to wait for the right house at the right price.
3. Inventory is still extremely low.
This part hasn’t changed, but it does tie into #2 above. Since the remaining buyers are more conservative, they’re not jumping on whatever listing hits the market, as was the case earlier in the year.
4. There are more over-priced listings on the market.
This is because sellers are working off “old” inaccurate data. They think if a house sold for $750K in March, it must be worth $850K now!
The main reason for this? Their agents are unskilled and do not provide their sellers with the correct information they need; for example, the information I’m discussing in this post!
5. Concerns over rising interest rates, inflation, and the general state of the world.
These are all valid concerns, and they tend to weed out the more conservative buyers.
All five causes above are interrelated. So, what’s the point of all this?
Your clients need clear information to make intelligent decisions.
It’s your job to provide that information.
Weekly sales data can be another insightful factor to consider when determining the price of a listing. After all, over-pricing is the kiss of death in an active market (or any market).
It’s also an easy way to differentiate yourself from the real estate drones.
From the Mirriam-AgentSkills dictionary:
real estate drone \ drōn \ a real estate agent who provides the exact same information as every other real estate agent.
2 thoughts on “Have We Passed the Peak of the Market?”
Thank you, Ted, I have seen a change however, it still is strong with some competing offers. I do believe many folks know a bubble eventually bursts and with the rise in interest rates that is an indicator.
Yes, the market is still definitely very strong. But sellers do need to be a bit more cautious about over-pricing, as compared to a month ago!