Southwest Florida Real Estate Stats

How do comps compare to market statistics, and more importantly, when should you look to one over another?

• COMPS: This stat helps consumers who have already decided to buy something evaluate the different options on the market; helps a seller understand how their product stacks up compared to other products currently “on the shelf”

• MARKET STATS: These help professionals gauge the health of the marketplace overall and to set expectations throughout the transaction for both buyers and sellers. Helps them communicate how competitive the marketplace is, how pricing is trending, whether the marketplace favors buyers or sellers, how quickly assets will move.

Comps: The Value of Features to Individuals

Consider a near-universal experience: buying a new vacuum cleaner.

When you go to buy a vacuum, you start comparing features and evaluating price, looking for the machine that will ultimately suit your specific needs. 

A pet owner may require certain tools and features that a person without pets doesn’t need. An older person may need a lighter machine, which could cost more, whereas a young college student doesn’t mind the cheaper, bulky model. The one thing that unites every consumer in the market for a vacuum is that they are in the market for a vacuum. Value is placed on aspects of each machine based on their specific needs — what matters to one person may not to another.

Comps are similar — they look at the individual features of houses that have recently sold very close to the area of the house in question. Features are compared: Does this house have a pool, a view, a yard, any major appliance upgrades, etc.?

Comps look at specific properties in a very small area and compare them to one another at a particular moment in time. Comps are used to set the list price of a home and help sellers know how their property stacks up compared with other homes that recently sold. Comps matter most to people who have decided to actively participate in the market or have made the decision to buy or sell.

Market stats: Housing as a Commodity

Market statistics elevate above the individual and consider the marketplace in general.

Continuing the vacuum-cleaner analogy, market data helps answer some of the following questions:

  • How many people are in the market for vacuums?
  • Do people have the money to purchase high-priced models or more entry-level models?
  • How many other models are there for people to choose from?
  • Is the price of my vacuum in line with the others on the market?

Looking at stats removes the individual features of homes from consideration and allows people to consider what all homes in a particular area (ZIP code, city, county, etc.) are doing. Stats convey how quickly homes are selling in an area and for what percent of the listing price. This can then help people to understand how their transaction could go based on what is happening around them, beyond the handful of recent sales. 

Adapted from Florida Realtors News.