Are We Listening to the Market --- or Reacting to It?

We spend a lot of time in real estate studying comps, square footage and market data. But what if understanding human behavior is just as important as understanding the numbers?

I have a confession to make.

I hate preparing CMAs.

There. I said it.

It's not because I don't believe in data. I do. Comparable sales are useful. They give us context. They help us understand where the market has been.

It's what we do with them that I question.

We take three homes that sold in the past, make adjustments for square footage, bedrooms, bathrooms and kitchen updates, and somehow arrive at a number we're tempted to call what another home is worth today.

I've always wondered about that.

Especially in the mountains.

Trying to fit a unique mountain property into a traditional CMA can feel a little like trying to put it into a cookie-cutter box.

Two homes might both be 2,500 square feet with four bedrooms and three bathrooms and still be completely different homes.

The land is different. The access is different. The light is different. The privacy, views, layout, architecture, condition and potential are different.

You can adjust numbers on a spreadsheet all day long.

But can you really adjust for how it feels to stand on the deck looking across the mountains?

And then there are the people.

Honestly, that's the part I find much more interesting.

Maybe we should study people as much as we study houses.

We talk about “the market” as though it's some independent force out there determining what everything is worth.

But the market isn't some mysterious entity.

The market is people.

People making decisions while navigating interest rates, headlines, jobs, relationships, uncertainty, excitement, fear, timing and everything else happening in their lives.

A seller sees their home through one lens.

They've lived there. They've cared for it. They've improved it. They've spent money on things the next owner may never even notice. There are memories attached to it.

Of course emotion gets involved.

Then a buyer walks through the exact same front door and sees something entirely different.

Maybe they're worried about interest rates.

Maybe they're convinced the market is going to crash.

Maybe they're afraid of overpaying.

Or maybe three other buyers suddenly want the same house and now they're afraid of losing it.

Same house.

Completely different psychology.

We saw an extreme version of this during the pandemic.

Low interest rates, limited inventory and intense competition changed buyer behavior dramatically. Buyers sometimes waived protections—including inspections—to make their offers more competitive.

The house didn't suddenly gain another bedroom or get a better kitchen.

What changed was the behavior of the people trying to buy it.

And a year later, some of those buyers were discovering just how expensive the things they agreed not to inspect could be.

That fascinates me.

Because we spend so much time talking about square footage, interest rates, inventory and price per square foot.

Maybe we should spend a little more time talking about human behavior.

Comps are the rearview mirror.

This is probably my biggest issue with how we use comparable sales.

They're history.

They tell us what a buyer was willing to pay for a particular property, under particular circumstances, at a particular moment in time.

That's valuable information.

But it's still the rearview mirror.

And somehow we can spend so much time analyzing that rearview mirror that we forget to look through the windshield.

What's happening right now?

What else can a buyer purchase today for the same amount of money?

How are buyers behaving?

How long are homes actually taking to sell in this market?

What are buyers responding to?

What are they walking away from?

Comps can give us a general view of the forest.

Then we get stuck in the weeds arguing about an extra bathroom, another 200 square feet or whose kitchen is more updated.

Maybe we reach for numbers because numbers feel safer than uncertainty.

Human behavior is messier.

So is intuition.

Neither fits particularly well into a spreadsheet.

So what is a home actually worth?

When a seller asks me, “What is my house worth?” I don't believe there's always one magical number.

Usually, there's a range.

We can study the past sales. Look at the current competition. Understand the condition of the property. Pay attention to what's happening in the market. Look at what makes this particular home different.

All of that helps us make an informed decision.

But ultimately, it's the seller's home.

My job isn't to hand them a number and declare it the answer.

My job is to help them understand what I'm seeing, talk through the possibilities and the risks, and give them enough information to make a decision they feel good about.

They choose where they want to enter the market.

And then something happens that I think we sometimes forget:

The market starts talking to us.

The question is whether we're listening.

Listening isn't the same as reacting.

Showings tell us something.

Buyer feedback tells us something.

Offers tell us something.

No offers tell us something too.

But none of those things exists in a vacuum.

If homes that once went under contract in five days are now naturally taking several weeks to sell, why are we panicking on day ten?

Somewhere along the way, getting a home under contract in three days became a badge of honor in real estate.

And I've always wondered...

Why?

Sometimes it was brilliant pricing and marketing.

And sometimes the perfect buyer happened to walk through the door on Tuesday.

We should probably be honest enough to acknowledge both.

The same goes for price reductions.

There are absolutely times when the market is telling us very clearly that the price needs to change.

Then we should listen.

But sometimes I wonder whether we're actually listening to the market—or reacting because we're uncomfortable that something hasn't happened yet.

Those are very different things.

Patience can be part of the strategy too.

And sometimes listening requires sellers—and yes, agents—to get our egos out of the way long enough to see what's actually happening.

Buyers aren't immune either.

Fear works both ways.

Fear of overpaying.

Fear that prices are going to fall.

Fear of interest rates.

Fear of buying at the “wrong” time.

And on the other side...

Fear of missing out.

Fear of losing the house.

Fear that someone else is going to get there first.

That's why I want my clients to understand the data without handing their decision-making over to it.

I also want them to trust themselves.

A buyer can walk into a home that checks every box on paper and still know something doesn't feel right.

That matters.

A seller can hear five opinions about what they should do and still need to decide what makes sense for their own life.

That matters too.

Sometimes I think one of the most useful things we can do is simply step into the other person's shoes.

If you're selling, imagine you're the buyer walking into your home today with all the other choices available.

What would you see?

If you're buying, imagine you're the seller receiving your offer.

How would you see it?

It doesn't mean everyone suddenly agrees.

It just changes the conversation.

And maybe we don't need quite so many rules.

Wait until spring.

Drop the price.

Offer over asking.

Never pay over asking.

This is what the comps say it's worth.

I've never been particularly interested in doing something simply because that's how real estate has always done it.

If you need—or want—to sell, let's understand what selling looks like now.

If you want to buy, let's understand what buying looks like now.

Not last spring.

Not during the pandemic.

Not six months from now in a market none of us can predict with certainty.

Right now.

Look at the data.

Understand what it's telling us.

Pay attention to what's happening around us.

Give ourselves enough space to observe rather than react.

And maybe trust ourselves a little more in the process.

Because the data matters.

The comps matter.

The numbers matter.

But the market is human.

And maybe understanding people is just as important as understanding the numbers.