By Thomas Carroll, REALTOR®
Supply and demand are the two sides of the pricing coin. Today we will be talking about demand. Realtors have access to what is called the Local Home Demand Index. This is published by Bright MLS and it breaks housing demand down across the state of Maryland. You can look at demand by region, county, city, or zip code. This knowledge can help buyers and sellers alike make a more informed decision when it comes to buying or selling their house.
What can this knowledge do for sellers?
This can help determine how aggressively to set the asking price on your home. If you are in a zip code that is leading your county as far as demand goes, maybe you set your asking price 2-3% higher than the most recent comp. If you are selling your home and it is in one of the lowest demand areas of your city, maybe you set your asking price right at or slightly below the most recent sales comp. Other more personal factors will absolutely play a role in how you price your home like timeline for needing to sell and carrying costs, but the demand index combined with recent comparable sales can be a very solid guiding light.
What can this knowledge do for buyers?
For buyers, the ways this can be used are many. Not sure how aggressive you will need to be with your offer in order to land your dream home? Check the demand index. Is price appreciation one of your top goals? Starting with the zip codes where demand is highest might be a strategy to employ that will help narrow your search. Looking for areas where you will not face heavy competition from other buyers? Look to the zip codes where demand is comparatively low. Trying to estimate what your vacancy rate might be on a potential investment? Check the demand index for insight.
Overall, this index can be very helpful in guiding your decision making and it is one of the valuable data points that your Realtor can provide. Interested in seeing what demand is like in your areas or zip code of interest? Feel free to give me a call! I love talking real estate and would be happy to hear from you.