Jeffrey and Deborah Kosnett had considered selling their brick town house in the Kings Contrivance village of Columbia for three years. But a "For Sale" sign wasn't pounded into the front lawn until they convinced themselves their neighborhood realty market had actually begun to turn around.
Like many prospective home sellers, the Kosnetts had an intuitive belief that the market was better. They imagined that the spring buying season, moderate interest rates and a cease-fire in the Persian Gulf would bring more buyers out.
But Mr. Kosnett, senior associate editor at Changing Times magazine and a personal finance specialist, knew intuition alone wasn't enough. Realizing that neighborhood realty markets can vary dramatically (even within the same region) he went to some lengths to research his own subdivision before deciding to sell.
"We wanted the comfort of knowing there would be sales traffic through the neighborhood and that we could get our asking price," Mr. Kosnett says.
Is your neighborhood realty market cold, cool, lukewarm, warm or hot? If you're a potential seller who has been waiting on the sidelines for the right moment to go back into the realty game, you don't need a personal finance background to find out. By looking at a few key statistics and spending an afternoon or two talking to agents, you can quickly assess your market.
"It's relatively easy to find out what's real for you and your neighborhood," says Richard Rosenthal, a National Association of Realtors vice president.
Real estate specialists offer these pointers:
* Restrict your homework to your subdivision or a one-mile radius from your home. If you live in Columbia, knowing what's happening in Federal Hill, Annapolis or Towson will do you little good.
If you want to know how other sellers are faring, you need to find comparable houses in the immediate vicinity of your home.
* Look at key statistics to judge the sales momentum in your neighborhood.
Most realty agents can crank an impressive array of numbers out of their computers. And the statistics can be intensely local -- focusing solely on a single neighborhood.
One key measure is "percentage of list price to sale price." With this statistic, you can determine how much of the asking price sellers in your neighborhood have received for their properties. (There are exceptions, but most houses sold through agents are priced close to actual market value.) High list-to-sale percentages typically indicate strong demand.
Another key measure of sales activity is "days on market," or DOM. This indicates the length of time from the day a property is listed to when it sells. If the DOM's in your neighborhood are short, you can assume the market is probably warm. (In using DOM data, be careful to weed out properties that have gone through one or more relistings.)
* Find out what the competition is doing.
You need to know how many properties are for sale in the neighborhood, how they're priced, how they show relative to yours and how much sales traffic they have generated.
"If you have seven homes on the market on your street, this is probably not going to be a good time to sell. You're probably not going to get top dollar. It's all a matter of supply and demand," says Sally Bielaski, sales manager for the Howard County office of Coldwell Banker.
To spot the competition, drive through the neighborhood and jot down the addresses of properties for sale, plus the names and phone numbers of the listing agents.
"Don't be afraid to call the broker to find out what the scoop is -- even if you have no interest in buying a house," Mr. Kosnett says.
* Avoid making judgments on the market based on superficial knowledge of a single property.
Before doing their homework, the Kosnetts were troubled that a home two doors from their own had languished unsold for many months. They worried this was a sign the community was unattractive to buyers.
But a closer look at the property told them all they needed to know. The other town house had, in fact, received a number of lookers. Yet after years of abuse from boarders who occupied the place, it was in terrible condition. A tour of the home's interior, arranged through the listing agent, was all it took to convince the Kosnetts that the unsold property was no sign of a bad market.
* Check out realty open houses in your community.
You can learn a lot about your market by learning about open houses in your area, says Harley E. Rouda, president of the National Association of Realtors. Stop by and chat with agents conducting the open houses, asking for information on pricing and volume of traffic.
When talking to the agents, there's no need to hide the fact that you intend to sell rather than buy, Mr. Rouda says. You're likely to get plenty of information, anyway, he says, "because real estate people love to talk."