The Pond

“The Pond” analogy, refers to a pond with fresh water flowing in from the left, traveling thru the pond and exiting on right.  If a property is priced/prepared/marketed well, it enters on the left, “flows” across and exits quickly to the right (sold).  Properties that are not priced/prepared/marketed well, sink to two different levels; “Show and Place” or the “Stagnant Mass”.  When owners find themselves in these lower levels of the pond, changes need to be made in price/preparation/marketing to get the property back in the “Flow”, so it can be sold and exit the pond.

Screenshot 2014-10-02 11.55.16

 

If we look at the pond chart for the past 24 months, we see that, on average, 2.5 properties come on the market each month (from left) and 2 properties are sold (to right).  Supply (2.5) was greater than the demand (2).

With the current inventory of 5 units for sale, that are selling at a rate of 2 per month, it would take 2.6 months for all the properties to sell (given no new supply coming on).

Given these numbers, a property owner had a 39.2% chance of selling 24 months ago.

Screenshot 2014-10-02 11.53.57

 

If we fast forward to today’s market, the pond for the past 6 months, we see that an owner’s odds of selling have improved to 50%.  Supply is coming on the market at 1.7/month and selling at 2.5/month.  There is not enough supply (1.7) to meet the current demand (2.5).

5

 

Leave a Reply

Your email address will not be published. Required fields are marked *

*