Do you think national headlines are helpful for your real estate strategy?
Every House Is Its Own Market
Quick heads up, slide into my DMs or comments here or shoot me an email if you want to discuss this week’s inflation numbers or what Warsh said this morning – because I do too. And, I will tell you what I really think. But today, I want to point out that national headlines aren’t going to answer your personal financial questions.
The Sentence I Say More Than Any Other
Every house is its own market
It sounds like something you put on a coffee mug. It is actually the most practical real estate strategy I know, and the reason I know is that I have watched two houses on the same street, listed within a month of each other, end in completely different places. One went in nine days with two offers. One sat for four months and sold with a price cut and a rate buydown. Same street. Same rates. Same month.
An interesting facet of the advice I give you as a mortgage lender is that I’m also actively shopping the market you are. I purchase property every single year. And I remind myself, every house is its own market. So that I can avoid the mistake I made on my own lake house – when I got outbid playing the game poorly and then made a list price offer site unseen on the next house I liked, out of trauma not strategy. I forgot my own best advice.
Nobody reading a national headline could have predicted either outcome – in my story or the one about those two houses on the same street. And yet almost every decision I watch people make right now is being made off a national headline. So let me show you how wide the gap actually is, and then I will give you the five numbers to pull instead.
I want to be careful here because I write about national data constantly. It is not useless. It tells you the weather. But it can’t pick your outfit for you, ya know?
Here is the gap.
Median days on market, as of a study of Redfin data covering the 100 most populous metros: the national median is 66 days. San Jose came in at 12 days. Austin came in at 110 days. San Antonio at 109.
Sit with that. A seller in San Jose is fielding offers in under two weeks. A seller in Austin is on month four. Identical mortgage rate. Identical Fed. Identical headlines. Nine times the difference in how long it takes to sell a house.
Now price cuts. Nationally, roughly 21% of active listings had a price cut in the four weeks ending September 20, which Redfin called the highest share for that time of year since they started tracking in 2022.
Inside that 21%:
· Denver: 30.9% of listings had a price cut
· Indianapolis: 29.9%
· San Antonio: 26.8%
· Minneapolis: 25.3%
· Seattle: 24.3%
· Boston: 23.8%
· San Francisco: 9.6%
Denver sellers are cutting at more than three times the rate of San Francisco sellers. In the same month, at the same rate, in the same country.
And here is the part that should kill the last of your faith in the national number. Seattle's median sale price in August was $874,421. Indianapolis was $259,828. A house in Seattle costs more than three times a house in Indianapolis, and their price cut shares are 24.3% and 29.9%. Almost the same. Price level tells you nothing about leverage.
One more, because it is my favorite. Boston's price cut share rose 7.6 percentage points year over year, the biggest jump on the list. Houston's fell 0.6. One of those markets is handing buyers leverage faster than almost anywhere in the country and the other is quietly tightening, and if you only read national coverage you would think they were having the same year because the calendar didn’t change based on location.
The Five Numbers That Actually Describe Your Market
So here is what to do instead of reading a headline and feeling a feeling about it.
Pull these five for your zip code, or have your agent or lender pull them, in your price band. That last part matters more than anything else on this page, and I will explain why in a second.
1. Months of supply, in your price band
This is the single most useful number in real estate and almost nobody asks for it. Take the active listings and divide by the pace of monthly sales. Under about four months is a seller's market. Over about six is a buyer's market. Between them is where a lot of negotiation actually happens, but is often overlooked.
The reason to run it by price band is that one zip code routinely contains two opposite markets. Entry level inventory under the local median can be moving in two weeks while anything above $800,000 sits for a season. Those buyers are having completely different experiences and the zip code average describes neither of them.
2. Median days on market, trending
Not the number by itself. The direction. A market at 40 days that was at 25 last quarter is cooling fast and the sellers in it have not emotionally caught up yet. That lag is where your leverage lives. A market at 70 days that was at 95 is tightening, and if you are planning to negotiate like it is still a buyer's market, you are about to lose a house.
3. Share of listings with a price cut
This tells you how many sellers have already accepted reality. A high share means expectations have reset and your offer will not be an insult. A low share, like San Francisco's 9.6%, means sellers are still holding their number and you are going to spend a lot of energy on people who are not ready to move.
4. Sale to list price ratio
What houses actually close at versus what they asked. Above 100% means buyers are still competing. At or just under 100% means normal. Meaningfully under, say 96% or 97%, means there is room and the asking prices in your market are aspirational.
5. Absorption of new listings
Of the homes that came on in the last 30 days, how many went pending? This is the only one of the five that is a leading indicator. Everything else tells you where the market has been. This tells you what is happening right now, which matters enormously in a market that has moved seven straight weeks on rates.
You know what’s even better than pulling all these numbers yourself? Working with a realtor who understands them at a hyper local level.
And Then There Is the House Itself
Here is where I want to push past the usual version of this conversation, because stopping at the zip code is still not granular enough.
Every house is its own market, and I mean the house.
Remember the two listings, same street, same square footage, same month? One seller inherited the property and has no mortgage and no deadline. The other seller already closed on their next house and is carrying two payments. Those are not the same negotiation. They are not even playing the same game. The data won’t even help you here.
What tells you is the stuff an experienced agent and lender can actually find out.
· How long has it been listed, and how many price changes? A seller who listed in August and has cut twice is a fundamentally different negotiating partner than one who listed last week. Time on market is motivation, measured in weeks.
· What did they pay, and when? A property bought in 2021 with 5% down at a high price has almost no room to give you a concession, no matter how motivated they feel. One with fifteen years of equity has enormous room. Motivation without equity is just sympathy.
· Has it been withdrawn and relisted? Expired and relisted resets the days on market clock on paper. It does not reset the seller's patience. That seller has been living with this for months and the public data is hiding it from you.
· Where are they going? A seller already in escrow somewhere else has a hard deadline and knows it. A seller who has not started looking has nothing but time.
· Did they do a pre-listing inspection? A seller who will not pay for a pre listing inspection is telling you something, and a seller who already did one is much more confident about the product they’re selling.
I will argue these facts should impact your strategy more than the inflation numbers or even Warsh headlines today.
What This Means If You Are Buying
Stop asking whether it is a good time to buy. That question has no answer, because it is not a question about you.
Ask instead: in my zip code, in my price band, how many months of supply are there, which direction is days on market moving, and what share of sellers have already cut? Then ask about the specific house: how long, how many cuts, how much equity, what deadline…
What This Means If You Are Selling
Your competition is not the national market. It is the six other houses a buyer can see on Saturday in your price band, plus the builder down the road with margin room you do not have.
Go look at those six. Actually look. Then price against them rather than against a number you heard on a podcast, because the buyer looking at your house is comparing it to those six and nothing else. If four of the six have already cut and you have not, you are the expensive one, and in a market where the median listing takes 66 days, being the expensive one is how you spend a full season on market and then take less than you would have gotten in week two.
What This Means If You Work in This Business
This is the part I will say plainly to my agents and loan officers.
Reciting national headlines to a client is not analysis. Anyone with a phone has the same headlines you do, which means it is worth precisely nothing, and clients can feel that even when they don’t articulate it.
What they cannot get anywhere else is somebody who will pull five numbers for their specific zip code and price band, find out what the seller actually paid and when, and tell them what it means for the offer they are writing on Tuesday. That is the job. It has actually always been the job. In a market this fragmented it is also the only real differentiator left, because the people who are losing right now are mostly losing to generic advice.
The Part I Want You to Hear
I am not telling you the macro does not matter. I write about it every week and I will continue to do so.
I am telling you that the macro is the 7-day weather forecast and your zip code is the “feels like” number and the specific house should set your outfit. People make decisions days in advance off the weather report days and then wonder why they got rained on when they finally made it outside.
The national median is 66 days. Somebody in San Jose is selling in twelve. Somebody in Austin is on day 110 and would take almost any reasonable offer to be done with it.
And again, if you want my read on this week's headlines, reply to this. I still want to talk about those.
