You know, but how do you convince your sellers?
We’re hearing anecdotally from REALTORS® that the market is shifting. Demand remains very high for certain property types in a number of locations, but as more supply comes on stream, it is helping to soften the frenzy.
Members are telling us that they’re seeing fewer inquires and multiple offers, and subjects are back on the table. One recent Fraser Valley transaction at the beginning of May is an example. A Surrey buyer who had previously tried for multiple homes finally won out because their offer was the only one.
For buyers collectively, this is a welcome development, but as you well know, sellers want yesterday’s prices.
So, how can you use your MLS® data to help prove to your sellers that the market is changing, and they may need to adjust their expectations?
By using one of the best little measurements around, the Sales-to-Active-Listings ratio.
Head to the FVREB Stats Centre, select your sub-area and property type. At the bottom, click on the Sales-to-Active-Listings ratio (SALR) button.
A reminder (because we’ve talked a lot about this multipurpose stat in the past) that the SALR is a single number that tells you if the market is favouring buyers, sellers, or is balanced.
For the Lower Mainland, an SALR higher than 20 per cent indicates a sellers’ market, under 12 per cent a buyers’ market, and in between –- 12 to 20 per cent – is considered a balanced market.
Next week, we’ll have May’s numbers, but even looking at April’s numbers, the trend is clear. Yes, still a strong seller’s market for all three of our main, residential property types in the Fraser Valley, but you can see the trajectory. All three SALRs have dropped three months in a row.
The sales-to-active-listings ratio for detached in West Newton is teetering on a balanced market
Because real estate is local, you’ll of course select your client’s sub-area and property type, which may or may not reflect board-wide trends. Here’s a SALR graph, as of April, for single family detached for four sub-areas in Surrey – West Newton, East Newton, Panorama Ridge and Sullivan Station.
In Sullivan (orange line), the SALR went from 147% to 60% in one month. Will be interesting to see what May’s numbers indicate. West Newton is down to 28%, from a high of 79% in February, teetering on a balanced market.
You have many data tools in your client education toolbox – you have your CMAs, evidence of a huge influx of new listings to show your clients and as mentioned above, fewer inquiries and offers – but don’t forget about the power of visuals of actual MLS® data, the most trusted resale housing data in Canada.
Emailing your sellers a graph of a three-month trendline heading south fast, may help support your recommendation that they lower their expectations and accept a reasonable and fair offer.
Haven’t used the Stats Centre before? In March, almost 700 Fraser Valley members logged 3,000 hours using the tool and shared over 1,000 charts with clients. Check it out! http://stats.fvreb.bc.ca and to reward you for reading this article, a final tip: in the tool itself, under the User Manual & FAQ tab at the top, there’s a handy seven minute how-to video, to help you get the most out of the tool.