In order to understand the market we are currently in here in Halifax, you need to understand what is driving the multiple offers, low inventory, etc.

A metric that REALTORS® use is the Sales-to-List-Price Ratio, or in other words, "What is the percentage of price over the list price that homes are selling for?...On average!

So while the headlines might display the dramatic, the reality is a little different. In order to get an average, some properties will sell for a lot more or a little more, and some will sell for a lot less or a little less! It's all about averages.

Historical Pricing vs. HYSTERICAL Pricing

When doing a market analysis for a new listing, REALTORS® look backwards, historically, to recent sales of similar type properties, in similar areas, within the time frame of similar activity.

However, when sufficient homes as previously described sell, the historical pricing, in the current market, goes up. By doing this, REALTORS® avoid the HYSTERICAL pricing model and use market values to set the listing price.

Keep in mind, supply and demand can move the selling prices up, just as an oversupply can move selling prices down!

Real Estate is not only a transactional business it is very much a cyclical business - there will always be highs and lows in the market. While numbers and statistics are great, the reality is, knowing and understanding HOW the market works and WHAT you need to do to make it work for you are also important. Don't let the numbers and the headlines scare you from pursuing your Real Estate goals.

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