Change is coming to communities across Washington State. Do you need guidance about what middle housing means for your buyers and sellers? Middle Housing - duplexes, triplexes, cottages, ADUs, and increased density - is already impacting what can be built on a property. Knowing where, what, and when these changes are coming to your community will be critically important. The Middle Housing Resource Center, will be chock-full of videos, resources, and more, all designed to help you become an essential expert to your clients.
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If you haven't taken a dive into your MLS stats and tried out its powerful market data tools, you're really missing out on an incredible opportunity to identify niche markets for growing your business, trends that will help your buyers and sellers, and so much more. Plus, it just gets better from there as you become more familiar with your market.
However, when it comes to new market segments like middle housing, you'll find that while MLSs have incredible tools you need, but reality is going to create challenges that you should be aware of.
Let's take the middle housing segment a step further and say you want to look up pricing trends for properties with an accessory dwelling unit (ADU) or maybe a detached ADU. For our local MLS, the research process is straight forward. Start with a General Single-Family search, pick your areas, choose solds, pick your time range, and in the ADU section select both attached and detached. Pick a few more date ranges and boom, pricing trends at your fingertips!
Get step-by-step instructions for Northwest MLS in our latest ADU & Middle Housing Report newsletter over at MiddleHousingHelp.com, then subscribe to the weekly newsletter and get useful tips, info, and advice every week on this amazing growing market segment.
Before you get giddy with this new power though, watch out for these challenges that commonly plague niche markets – and while ADUs are rapidly growing in popularity since our Washington State passed legislation to make them more buildable a couple years ago, you are still going to have to deal with:
My rule of thumb is you need at least 12 solds in a month on average in order to identify a trend. That's 144 a year. So, if you don't have that, you probably don't have enough data to call it a trend yet – it's just food for thought. You may need to expand your area.
It's true. A lot of support for ADUs in the MLS is very new and that creates issues. Older sales might be missing. It also means that brokers may not be marking up their properties in the MLS with the right new options available to them. You're probably going to have to do a little extra work and be eagle-eyed if you want to go back in time much at all.
When you combine not enough listings with new niche product you start to run into another danger. For example, let's just talk all of SFR in one county in a month – you may easily have thousands of sales. And if a few of those sales have their price entered with missing zeros you aren't really going to notice a big difference on average. Filter down to just properties with ADUs or another niche market – maybe you are barely skirting that 12-solds-per-month rule of mine – and just one property with badly entered pricing could have a dramatic effect. Assume there are going to be errors and watch out when your results are small!
When it comes to ADU/DADU product, one of the realities of our growing market is that there are a lot of properties out there classified as an ADU, but not actually permitted. When it comes to this market segment, that can hurt property values, which you should consider accordingly.
Your MLS is a complex dance of systems and not all of them may be updated with the goodness needed for the niche you are researching, particularly if your niche is properties with an ADU. You might have to get creative with a regular search or try a different MLS tool to get the information you need. When in doubt, contact your MLS and ask how to do it!
Don't let these challenges get in the way. Once you are aware of them, you'll get better at working around them and your market expertise will grow!
Want to learn more about what's going on with ADUs and middle housing right here in Washington State? Join our newsletter and get weekly advice for solving problems like the above, updates on what cities are doing, and much more. Sign up here!
By Denise Lones CSP, CMP, M.I.R.M.The founding partner of The Lones Group, Denise Lones has over three decades of experience in the real estate industry. With agent/broker coaching, expertise in branding, lead generation, strategic marketing, business analysis, new home project planning, product development and more, Denise is nationally recognized as the source for all things real estate. With a passion for improvement, Denise has helped thousands of real estate agents, brokers, and managers build their business to unprecedented levels of success, while helping them maintain balance and quality of life.