You may be hoping that, now that you’re a real estate agent out in the real world, all that math from high school and college are behind you. Well, not quite. As an agent, you must have a thorough grasp of vital statistics that reveal trends in the market and convey vital information to your clients. 

Digital tools have made it easier than ever to access tons of data with just the click of a button, but finding the most relevant information can be a hassle if you don’t know what you are looking for. Luckily, experience has shown that there are some key statistics that you should regularly reference when operating a successful real estate business.

Here are five essential statistics that you should follow.

Inventory of Homes Available

This is one of the most fundamental statistics that every real estate agent must know. It’s so basic that you may be rolling your eyes that it’s even on this list. However, you’d be surprised how many real estate agents get lazy about checking these numbers. 

Market inventory is a stat that you should be able to quote from memory, and clients will ask about it. You should know how much market inventory there is in months to determine if the market favors buyers, sellers, or is in equilibrium. Right now, Idaho is seeing unprecedented low inventory, so understanding what’s going on with this stat is essential.

Mortgage Rates

An essential stat because it tends to change quickly and often. Mortgage rates adjust according to a wide set of criteria, and you need to know if changes to interest rates could be raising concerns for buyers or sellers.

Mortgage rates have been at historic lows due to Covid-19 and are expected to remain low, but even slight increases over 2021 could significantly change market conditions.

Year Over Year Home Sales

This is another deceptively simple statistic that can convey a lot of information. Looking at home sales year-by-year allows you to judge the cycles of the real estate market across time, giving you a “macro” as well as a “micro” picture of what’s going on with the market. 

This statistic is very important when dealing with clients because it can help identify whether homes are selling at a rate that is likely to last or if exogenous factors are making the market behave in ways that could impact a buyer or a seller. 

Days on Market

If monthly inventory gives you a broad view of the market in a city or state, watching days on market allows you to get a more specific understanding of neighborhoods where you are selling properties. 

Buyers pay close attention to DOM to determine when listings are fresh and worth checking out before the competition closes in. Keeping an eye on that day-by-day counter will keep you focused on closing and can also be used to produce measures of central tendency (i.e., medians and averages) for zip codes and other, smaller locales. 

Affordability Index

This statistic combines a lot of important information about the housing market in one convenient place. In simple terms, the affordability index measures the household income required to cover the principal loans and interest for a median-priced home. 

So, shifts in mortgage rates, interest rates, home prices, and average household income can all impact affordability. In turn, the affordability index helps show what the impact of these changes is in aggregate. Sometimes one factor (like low mortgage rates) might suggest a ton of activity ahead, but other factors (stagnant incomes, for example) might complicate things. With this index, you are better suited to look at general trends for buyers and sellers overall.

There are many other statistics that realtors should track (median home price is one of them), and when you specialize in particular markets, you might need to find much more specific data. These five basic statistics will give you a solid foundation to help you communicate with clients and identify trends with accuracy.

Want to investigate what these stats imply for the Idaho real estate market? Boise Real Estate School has you covered! Check out our educated predictions on what the post-covid real estate market will look like for Idaho in 2021!