Well what a time we are having in our topsy turvey Wagga Wagga real estate market.

And understandably sometimes I find it really hard to read the signals and indicators, and I find it even harder to understand the real estate statistical jargon.

There are plenty of sources out there in the market that track and report on indicators like the ‘mean average’ price. The ‘average’ price. The ‘mean’ price. And even the ‘median’ price! And that’s not the half of it. Seasonally adjusted indexes and proportion of auction sales, days on market, clearance rates, and on and on it goes.

When I am talking to my owners and potential vendors I love to speak in everyday terms that make things easily understood. It might appear a bit homespun, but I would rather that we all understood what is going on out there in real estate world rather than just nodding agreement with a confused look on ones face.

When I am on deck at an open house or even out socially I am often asked, somewhat like a doctor or a dentist, for a quick verbal check-up.  A casual confirmation for a certain condition and an equally casual diagnosis. Often people will say “how’s the market?” and “are houses selling?”

Quoting the mean average is not very helpful. However simply saying something like “this time last year we sold 15 houses in the month and so far this year we have sold 27 houses” gives some idea that things are moving better than they were. Remember values are always relative.

Or if asked is it a good time to sell, it always helps to paint a clear simple picture that people can relate to. Spring is an active time in the market when houses look their best. But if everybody has the same idea, then it means there are more houses on the market and therefore there is more competition amongst sellers. This usually results in a slight decrease in sale prices.

Another good measure of activity is the number of inspections conducted. At Fitzpatricks, we are great collectors of data. In our weekly sales meeting we like to read and interpret the indicators such as numbers of inspections at an open house. This is a prime indicator of market activity. We also measure the number of one-on-one inspections conducted each week. An interesting statistic for me is that, on average, every 7 inspections I conduct results in a sale of a particular house. Of course this is an average. If that number begins to blow out it’s fair to say that there is less heat in the market.

So what are the indicators telling us now, and how do we interpret them – simply.

At the moment listings are drying up. It’s fair to say that we are selling houses faster than we can replace them. This is putting upward pressure on sales prices. It will also mean that more houses will sell under the hammer at auction rather than being passed in.

And finally a good effective measure of the market is what we like to term DOM (days on market). DOM is a solid indicator of the state and confidence of the market. It is well known in real estate that the best price for a property is achieved in the first few weeks. Often, but not always. The shorter the number of days on market the healthier the market – simple.