ShowingTime's Showing Index Is More Critical for Predicting Future Real Estate Markets then Closing Stats

In the real estate industry, we often see media reports regarding monthly closing statistics from the local, state & national Realtor associations from 60-90 days ago, and cite these as predictions of future market trends. Studying the business through big shifts such as the tech bust (right after I became a Realtor), then 9/11, then the huge upswing in subprime mortgages and speculation...resulting in the Great Recession, followed by a slow and steady recovery all the way to the Pandemic (and resulting microburst of growth/appreciation and inventory scarcity the past 18 months)...I have constantly analyzed where to first find "shift" more accurately.

My issue with the traditional closing reports are that while they are undisputed as the most accurate view of true closing prices and volume, they are indeed inherently aged information and more a look in the rearview mirror then an eye into the road ahead. You see, if we (in the current cycle) are looking at closed transactions from April (and soon to be released, May) we are really reviewing consumer sentiment and activity from February as most real estate transactions take 30-45 days or more to close, and the average consumer takes weeks if not months to complete their search. So, to look at April's closed deals really shows us the activity taking place in the winter months, before the current interest rate hikes and overall inflation began affecting the market.

ShowingTime, conversely, monitors property showings for that month which means they are analyzing buyer activity given the market conditions of that actual period. So, in the image at the top of this article, April shows a dip in activity corresponding to the first signs of inflation, reduced affordability, and interest rate hikes as well as the continued scarcity of inventory for sale. To look at the traditional association statistics, the picture is only still on the upswing, because as of the winter months where the activity was taking place that RESULTED in those April closings--we were not yet in the situation we now face. So--to more accurately predict what is coming, we need to look at the more current consumer sentiment and resulting activity, not the end result 60-90 days later.

This became more defined to me during the beginning months of the pandemic, when June 2020 traditional statistics were reporting huge drops in closings because of course in March and April, we were restricted in our movement. But the ShowingTime reports were already indicating a large uptick in showings, which of course later resulted in the record transaction numbers of the late summer that year. I was able to more fully educate my seller and buyer clients, as well as the real estate agents I coach, as to how to strategize for that shift. And similarly, warning signs have been going off in my head for a slowdown much quicker thanks to the ShowingTime reports coming out the past two months.

Of course, no one has a crystal ball as to interest rates, or the overall economy/world events. But having a more timely picture of the activity of our consumers (along with mortgage applications, another gauge of activity at least a month ahead of what most likely will be closings) lets Realtors more fully gauge what potentially may be coming, and how to proactively prepare versus just parrot out past results. This information is available free online on a monthly basis through ShowingTime, and I highly recommend industry professionals time-block for an appointment with themselves for the last week of the month to review updates and then share that information with their sphere of influence.

For more information on the latest market trends, or to begin working with me as a consumer or coach with me as a Realtor, text LIBERT to 85377 for my digital business card and resources. And to review current housing inventory and pricing in nearly every market across the US & Canada right where you are standing, text LookWithLibert to 85377 for a geo-locational birds-eye view.