You may have a prospect or client looking to market to an area to generate buyers or sellers. The first thing they need to know is: What’s the opportunity?
Within a geographical area, opportunity = turnover (the rate at which homeowners are selling every year). If an area has a 6% yearly turnover rate, and 400 homes in the area, we know that there will be roughly 25 homes sold in that area over the next year. If an agent were to capture 10% market share of the 25 homes, that would equal between 2-3 listings and 2-3 buyers, for a total of 4-6 transactions in the coming 12 months.
Turnover = # of homes sold in past 12 months / total # of homes
i.e. 25 homes sold / 400 total homes = .0625 or 6.25% yearly turnover rate
Here are 2 ways to calculate turnover in a community or zip…
1- (QUICKEST) Calculation using a 3rd party service…
- Go to https://offrs.com/v5/territory.cfm?zip=85014
- Input zip code in box on top right, click “Search by Zip”
- Click a colored box territory containing most of the area you desire
- Click “More Info” button in small pop-up box
- Results window will show Total Properties and Est. Sales (& Turnover %)
2- (MOST ACCURATE) Calculation using FLEXMLS & WFG Profile…
- Login to https://armls.flexmls.com and search for all sold homes in a given area over past 12 months, then write that number down
- Login to http://wfgprofile.com (or one could use Monsoon tax system, accessible through FLEXMLS)
- Click on “FARM” in the top menu
- Select your area – 2 options:
- Type in zip, or select “Subdivision” option on left and search for subdivision
- Or use drawing tool at bottom of map (pencil) and “draw” on map by left-clicking area boundaries (to finish drawing boundary, right-click on your first point)
- Click “Count Only” on bottom left to view total # of homes in the area you selected
- Divide # sold (from step 1) by total # of homes — i.e. 25 sold / 400 homes = .0625 or 6.25% yearly turnover rate
I hope this helps! Let me know if you run into any hurdles with either process, or have an additional way of calculating turnover.