There’s no lack of property-specific data information out there.
It is often available with just the click of a mouse.
However, with this increased availability of data, there are new challenges.
How do you make sense out of all this data?
Whose numbers can you trust?
In today’s episode of the Michael Yardney podcast, I chat with Kate Forbes about her specialty, how to interpret data.
In the simplest sense, the median house price is the middle point of all sales ranked from high to low.
For example, if there is an influx of first home buyers in a location who are buying at the lower end of the price scale, then the median price will drop.
On the other hand, the median will go up if a lot of people in the area are renovating and upgrading their properties.
Median prices tell you what’s happened recently, but it doesn’t give you much information about individual properties.
It’s important to understand a number of factors with the number of properties for sale.
A number of new properties is indicative of vendor confidence.
How long houses have been on the market matters as well.
If there are a lot of properties for sale, but they’ve all been there for a long time, that’s not a good sign.
Days on market
I’ve found the trend of days on market can tell you whether we’re in a buyer’s or seller’s market.
If it’s taking longer for properties to sell, it’s usually a sign of softer market conditions and vice versa.
When there are fewer buyers out looking for property than there are properties for sale, vendors usually need to discount their asking prices to secure a buyer.
But when there’s plenty of buyer interest vendors have less need to discount their asking prices.
The more people that you have looking for one particular thing, the greater the market depth there.
If a rental yield starts rising that’s a sign that there is strong demand from tenants to live in those locations.
However, as more investors go to the location and property prices rise, rental yields begin to drop.
“We like market depth from owner-occupiers, not investors.” –Michael Yardney
“At any level of your financial journey, money management is important.” –Michael Yardney
“Being aware of your spending is one of the most powerful tools that you’ve got for being aware of yourself.” –Michael Yardney
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