When It Comes To Real Estate And Data, Keep It Local
At ICNY on Tuesday, OJO Labs Chief Real Estate Officer Chris Heller and Nest Seekers International Chief Economist Erin Sykes explained why real estate agents need to pay less attention to national data and dig into local insights.
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Although national housing statistics are helpful, they don’t tell the full story.
That’s the simple, yet powerful, reminder OJO Labs Chief Real Estate Officer Chris Heller and Nest Seekers International Chief Economist Erin Sykes gave the Inman Connect New York crowd during their Tech & Data Connect session on Tuesday, “What the Data Is Telling Us: How to Prepare and Future Proof Your Business.”
“Don’t just take a soundbite off of national media and apply it hands down across the board. It’s really dangerous,” said Sykes, who’s also a licensed real estate broker in Miami. “The other very dangerous thing is using words ‘always and never’… It’s the kiss of death.”
The duo said it’s easy for real estate agents to lean on national home-sales data when talking to clients since that’s likely what clients are bringing up in initial conversations about listing prices, buyer budgets and other transaction-related issues.
While it is OK to talk about national trends, Sykes said you must bring it back to what’s happening locally.
“I feel this pressure that everyone expects me to have a one-size-fits-all answer, and the answer is [that] it depends on where you live,” she said. “It depends on the markets that you’re personally working in.”
“Of course, we’ve seen a lot of headwinds; however, we see price fluctuations and price deductions of maybe five percent and 30 or 40 percent in other markets,” she added. “So it’s important that when you’re talking with your clients, you’re really exemplifying your local knowledge.”
Sykes advised agents to pay attention to several key local market indicators, including the average price per square foot, median days on market, sale-to-list price ratio and trends for specific housing types, such as single-family housing or condominiums.
“I think the velocity is super important right now,” she said. “It’s more about days on market right now.”
Lastly, Sykes urged agents to pay attention to other, less obvious market factors, such as the arrival of a new Whole Foods Market or other upscale stores that could drive demand upward.
“Take a broader stroke approach and look at what businesses are moving into your community,” she said. “These are things that we talk about colloquially every single day in our careers, but for some reason when you say the word data, people get uncomfortable.”
“You have to present these things in a way that’s comfortable to you,” she added. “I like to do a deep dive into what’s happening in the data, and I like to create reports that don’t just flash the numbers, but actually explain the numbers and do it in an editorial fashion”
“So, you know, when you’re using these points to really back up your case for the client, make sure you’re doing it in a way that’s authentic to you.”
On the business side, Heller said data is crucial in understanding whether your efforts are making an actual difference in your bottom line.
“There are things when the market is really good that we must spend money on that don’t give us a greater return, but we can justify it because it’s feeding the machine and bringing in more business,” he said. “In this type of market, there is no justification for something that’s not bringing a positive return on investment.”
Heller said market data is also helpful in revising your 2023 marketing plan and can guide your brokerage’s farming efforts.
“The other [use] is for our marketing and our current our lead generation efforts,” he said. “We’re really looking at the areas where you’re going to get the greatest return — some of the areas where properties are trending up, areas where we’re going to see people continue to move up and move down.”
“There’s also just using common sense and not getting lost in the analysis of things, but just making sure that we’re doing some activities that ultimately are going to lead to more transactions,” he added.