I tend to be a numbers person. I track a lot of statistics about my little piece of the market - what's sold, what's on the market and for how long and things like that. Our manager shared a little report that focuses just on our office and the Milford area market that we serve and it reinforced something that I've been telling my clients for some time - the heart of the current market is down in the $150-200K price range. What this report showed was the percentages of where our listings are priced and more importantly which price ranges are getting the most showing activity and thus the most sales.
There were 20 price bands on the report starting at under $50k and ending up at the Over $1,000,000 level. Because of the way the numbers were divided into those 20 buckets, the ranges weren't all on nice neat borders, so the $150-200K band ended up being $155,554 to $208,330., but that's close enough to support my point. That band represents just about 25% of our office listings ( 24.47% to be exact). It also represents 25.1 % of all of the showings that we are recording for properties and that category has the highest activity level (percentage of properties in each price band that get showings) at 24.7%. The next highest price band in all those categories is the one right below it - the $102,777 to $155,553 band, which makes up 14.6% of our listings and accounts for 21% of all showings. Taken together, houses from about $100 to about $200K make up 39% of our listing inventory and 46% of our showing traffic.
Those statistics are consistent with my own anecdotal observations in the market, both in Milford and elsewhere. I suppose a part of it is that so many of the foreclosed homes fall into that price range now and foreclosed homes is what most buyers are asking to see. The other confirmation for me that came out of this report concerned the slow activity in the $300-400K price band. Houses in that price range make up 23.7% of our listing inventory, which is a healthy slice, but they generated only 18.6% of our showings. (NOTE: due to the report price range boundaries, I had to use homes in the range of $261,108 to $419,438 for this price band, so the numbers are bit higher than the real 300-400 price band would have been) That has been a very slow price band for about 18 months now, since it covers a lot of the "move-up" houses that nervous middle management types have been holding off of buying.
The real "heart" of our market is between$102,777 on the bottom and $313,884 at the high end. That roughly $200K range represents 64% of our total market inventory and generates 70.5% of our showings. And showing eventually generate sales. As I compare these statistics to one that I keep on my Web sites they all fall into place. The lower price bands tend to have great numbers of homes in the inventory, but also tend to have lower Days on Market numbers, meaning that they turn over faster. Because there is more turnover in the lower bands, other statistics like the median sold home price tend to be held lower.
So, what does this means to you? Well if you have a home that would likely be priced somewhere between $100K and $300K it means that it's still a good time to be on the market, with lots of showing activity. If you house would price above $300K it means that you;ll need to be as aggressive as you can on price and be prepared to be a bit more patient and persistent. Your agent may also have to try some different marketing approaches to generating more showing traffic. It's also important, if you are gong to get less showing traffic, that you make the most out of what traffic you do get; so, listen to your agent's tips on how to best prepare your house to make the best impression on showings.