What's My Market Area, Anyway?

This is essentially a reprint of an earlier post, but it answers some questions for new visitors.

A lot of realtors have defined "market areas". Generally this means an area where the realtor trades. Size can vary, sometimes being as small as 1000 houses, and sometimes being as large as the whole town.

I concentrate on investment rental property. I buy it and sell it for my clients, and I also collect the rent off it. My market area, as a result, is larger than most realtors. I keep an eye on any area that I think my clients have a good chance of buying in. I don't, for example, spend much time watching West Van, because its too expensive, or Squamish or Abbotsford, because they're too far away.

I do watch Burnaby, Coquitlam, Maple Ridge, North Vancouver, New Westminster, Pitt Meadows, Port Moody, Port Coquitlam, Richmond, Vancouver East and the westside of Vancouver as well as parts of Surrey. I'm not saying you can't find good rental investment properties in other areas. I just don't keep an eye on them. The areas I watch are the subject of various automatic searches, and I review more information than I include in these daily numbers.

If this seems like too big an area to keep an eye on, please keep in mind that I work with a team of realtors and we are active i all thses markets. Its more demanding than working in one neighbourhood, but its the nature of the beast with investment property.

If it seems that these numbers aren't representive of the whole board, please remember that I don't claim that they are, but also recognize that I do watch a large portion of the Greater Vancouver board. I also include a small part of the Fraser Valley Board.

Since I first wrote this post I started tracking active listings and active listings still unsold after 90 days. In the beginning this search did not include any part of Surrey, but now the results posted here are based on searches of exactly identical areas.

What's the point of crunching these numbers on an almost daily basis? Very simple. It allows me to take the pulse of the market and determine if things are hot or cool. It gives me guidance when I negotiate the sale of a property: should we play hardball or should we close the deal? It gives me a feel for value. In short, it provides the food for thought that you need to try to understand the market. Besides, in the absence of hard numbers, we're always willing to believe our preconceived notions: numbers keep us honest.

Do these numbers allow you to draw conclusions about the future? To a certain extent, yes, but the accuracy of the conclusions depends on the individual drawing them. December's numbers, however, indicated that we'd have a listing push in January, and that is exactly what we're seeing. Can we draw implications about price from a comparison of sales to listings? Much tougher, I believe, which is why I also look at price changes and the number of sales going over list price. Even then the ability to predict price changes is very tough. However, when we can't do everything, we do what is possible, and when we have to make decisions about sales today, anything that can help us is welcome.