By ROY SANBORN
Real estate is all about numbers, math and formulas. There are mortgage calculations, amortization schedules, debt ratios, average sale prices, days on market, the percentage of asking to selling prices, tax rates, tax bills, and on and on. It is all about numbers. I took four years of college prep math back in the day when you still used slide rules to figure out things. I can't say I was a whiz, but I got by. I am sure I have forgotten way more than I retained and I certainly don't remember how to use a slide rule. I can't remember the last time I even saw one. Today, I wish someone with a lot more mathematical background than I would invent a slide rule that could actually calculate the probability of selling a house ... any house, in any condition. Maybe a computer program would be more appropriate today.
Most real estate agents can tell when they list a home whether they have a real winner or not. It's that gut feeling you get from being in the business long enough to know that this particular home is really nice, something special, priced right, and that it won't be on the market long. Of course market conditions and asking price all have something to do with the outcome of any sale.
I have heard it said that numbers and mathematics can be used explain everything in the world. So, out of curiosity, I looked at the statistics for all the residential sales in Belknap County in 2015. The average sales price for the year was just over $320,000 and on average it took 120 days to sell a home. The average year of construction for the homes that sold was 1967 and they averaged 2,025 square feet in size with 3.09 bedrooms, and 2.23 baths. I guess we can call it three beds, two-and-a-half baths, to be real. There were 330 properties that sold that had no garage. For those that had one, the average was 1.3 stalls. A 1.3-stall car garage would be good for a small car and a moped, so I think we should round up to two bays. One-stall garages made up 19 percent of the sales, two-car garages made up 35 percent, and three cars or more made up about 11 percent of the sales.
The majority, or 80 percent of the homes that sold had a basement and the averaged finished space below ground was 768 square feet. Being in New England, most homes that sold, or about 56 percent, are heated with oil. About 33 percent used bottled or natural gas, 9 percent were electric, and the rest were kerosene, wood, wood pellets, and one had geo-thermal heat. I think there were a couple that relied on body heat, too! The average size lot was 2.96 acres.
There you have it, the perfect house to sell; a three-bedroom, two-and-a-half bath, 2,225-square-foot home built in 1967 with a partially finished basement, oil heat, and a two-car garage on 3 acres will sell in four months for $320,000. Right? Maybe, maybe not, though it seems that you have got the odds on your side. But you also need factor in condition, quality, location, amenities, and more! Where is that slide rule and what is is the formula? It would be nice if we had one! You'd expect a home to sell quickly if it was mint condition, had new upgrades, was in the perfect spot, on a lake, and had no neighbors. But it could be overpriced! What are the chances then?! Is there a logarithm for this? From Wikipedia I see "Logarithmic scales reduce wide-ranging quantities to tiny scopes." I like the "tiny scopes" part. Whatever that means, it could help.
So to all you mathematical geniuses out there, I am requesting help to develop this new slide rule for real estate. We need to get to the root of the problem and not go off on tangents or cotangents. We may need to use some sines or cosines instead of signs and co-brokes. I think we can make a fortune with this, so give me a call.
Please feel free to visit www.lakesregionhome.com to learn more about the Lakes Region real estate market and comment on this article and others. Data compiled using the NNEREN MLS system. Roy Sanborn is a sales associate at Four Seasons Sotheby's International Realty and can be reached at 603-677-7012.
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