How to answer the inevitable question

It doesn’t matter if you have been in the real estate profession for one week or 20 years, the most common question you will be asked is: “How’s the market?”

There is no better opportunity than now, the beginning of a new year, to prepare yourself to answer this question as the consummate professional, one who knows the market and is willing to assist potential clients everywhere.

This question will pop up under many different circumstances, none more common than the casual social event, such as a barbecue or family gathering. Next to discussing the results of the latest football match and what team you barrack for, once people know you work in real estate, they will ask the age-old question, “How’s the market?”

How well do you know your market? What is the median house price and apartment price in your core market? How many properties were sold in 2023? How many properties are on the market currently? These are just a few of the questions a professional real estate agent should be able to answer within your response to “how’s the market?” Unfortunately, most can’t, and many reading this may think, “I don’t need to because I can grab that information online and produce it in a CMA when I am talking to a seller. But I can talk about other market stuff.”

Therein lies the problem. Most real estate sales agents will answer the question with a great deal of waffle, discussing how well the market is going, the results they have personally achieved, the buyers they are meeting at open homes and a prediction of the market in the future. No real sound facts or statistics to back up the many words that were said, nor will it deliver confidence to the person asking the question. Now I want you to imagine meeting an accountant at that barbecue, and you ask them about the new land tax laws and the implication to land/property holders. The accountant then outlines the current situation with land tax percentage calculations, then refers to the new tax laws, the recalculations and the short stay implications. You think, “That’s impressive, he was able to talk off the top of his head the exact changes that will impact the market.”

Both real estate agents and accountants are engaged by consumers to conduct very important legal work (yes, agents work under many laws outlined in the Estate Agents Act and the Residential Tenancy Act, just to name a few) and get paid very well for their services. Yet one studies their field and updates their knowledge to advise clients, whilst the other (the majority, not all) rely on the information from a single CMA.

If you want to be known as a local area expert, and if you want to stand out from other local agents, start studying the market information on a regular basis. The following are some tips to assist you in your local market to truly understand what is happening and to provide you with the knowledge to answer the most common question asked of agents: “How’s the market?”

If you haven’t already, register yourself on realestate.com.au as a buyer in your local suburb that you work, and register your buyer interest from $200,000–$10,000,000 so you receive every single new listing and sold information straight to your email inbox. As there are fewer properties on the market at this time of year, it is a great time to start a spreadsheet and list all of the properties that are on the market. Use the following as headings across the top of the spreadsheet and keep in mind, some of these will only relate to newly listed properties that you receive a notification from REA:

• Date
• Address
• Suburb
• Land size or appt
• Beds
• Baths
• Cars
• Price range
• SOLD price
• Agency name
• Date sold
• Days on market

By updating the list once a week and studying the following data, you will be able to answer the “how’s the market?” question with real-time knowledge and facts. You will also have real-time data rather than waiting for the data to hit your CMA provider, placing you ahead of the pack with sold data. If the price is not disclosed, don’t be afraid to call the agent who has sold the property and ask.

Also, look at the suburb information on CoreLogic or the two web portals for the latest rolling average median prices for houses and apartments. You will also obtain how many properties have been sold in the last 12 months, demographics and any other statistics that you find useful for your market.

Structure your answer by using the following formula:

• Macro
• Micro
• Specific
• Opinion

Examples:

• (Macro) We are currently in a two-speed real estate economy at the moment. Some areas have been impacted by the interest rate rises and the other parts of Melbourne seem to be travelling quite well.
• (Micro) In Smithville, we are seeing a mix of some OK results and some great results. There were 321 properties sold in 2023, down 51 from 2022, and the median house price dropped as much as 14 per cent but has now recovered half of that loss in the last quarter of 2023.
• (Specific) We had an auction on 16 December last year in Smith Street, and we had seven bidders, and the property went well over the reserve with a very happy vendor.
• (Opinion) This year should see a continued recovery. Do you have any plans this year to sell or buy?

Take a minimum of one hour every week to study your local market. Set up a spreadsheet of all properties so it is easy to track, and it will be a great quick reference point. Practise your answer to “how’s the market?” as it will be asked more often in 2024 as things continue to change.

So, back to that barbecue. “Oh, you work in real estate? Hey, how’s the market at the moment?”

Warren Tate is a performance coach at Harcourts Victoria.