Lessons from Zillow Talk

  I just finished reading the new book Zillow Talk, written by its CEO and its Chief Economist.  It was full of the Freakonomics type of factoids that I love.  Many I already knew, as would most real estate agents, but others were new to me.  Also, Zillow uses all of its data to quantify things we know intuitively.  They also use statistics, of course, to try to prove things we don't necessarily think are true.  That's the beauty of statistics!

We had a lot of fun at a recent sales meeting with where to bet on getting the most appreciation on a home (near Starbucks), what neighborhoods gentrify quickly (gay ones), and what real estate agents sell properties fastest (women).  It was interesting to note that, statistically, newer agents perform just as well as older agents.  The question that the figures don't answer is why that is.  Speculation ranges from the fact that they are more eager and have more time to devote, to the likelihood that newer agents are younger, and more technologically advanced.  Good to know, though, if you want to use your nephew.

One of the most striking propositions was that there is a best time to list.  We know that, of course, and always thought it was right about now.  When Zillow analyzed the sales data from all over the country, however, they determined that the absolute best time to list your home is about 30 days after the bulk of spring listings comes onto the market.  As they put it, "between the time you fill out your NCAA bracket and the time that the winner at Augusta slips on the green jacket."  That's important news for all prospective sellers:  Get ready to list at the end of this month, for best results!

Current Absorption Rates

Explanation of absorption rate: The rate at which available homes are sold in a specific real estate market during a given time period.  If you look at the number for Wallingford you can say “If market conditions do not change and if no new listings come on the market it will take 7.2 months for the current inventory to sell at the current pace of the market.  A balanced market’s absorption rate is typically between 5 – 7 months.”

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