The 3 Most Important Numbers to Look at to Make a Data Driven Real Estate Decision

If you’ve ever bought or sold a home, then you know there’s a LOT of different numbers involved. And even if you’ve never made a real estate transaction, I’m sure you’ve noticed that too. 

If you’ve ever browsed for homes on the internet, you were likely flooded with all sorts of different numbers and it might’ve left you wondering… “What do these numbers mean?! Are all of them important? Which ones should I actually be looking at?”

All of the data in the real estate world can cause a lot of confusion and overwhelm, but as your friend in real estate, I don’t want it to!

Numbers should never be the thing that scare you from making moves and it really just comes down to understanding what you’re looking at so you can then use that information to make data driven real estate decisions.

Because here’s the thing – buying or selling a home often starts with a lifestyle decision. 

Maybe you want your kids to go to a certain school so you need to live in that district. Or maybe you’re relocating due to a job change. Or maybe you want to be closer to family or in a certain area of town that’s a better fit for your life. 

But THEN, once you get past the lifestyle factors, data always has to come into play. 

There’s interest rates, home prices, days on market, price reductions, the list goes on. 

So knowing how to use the data that’s available to you can be major key in making a real estate decision that’s truly best for you! And while you of course want to partner with an agent to help you navigate the process overall, it’s also nice when you can look at certain numbers and know what they mean to you. 

Which is exactly what this blog post is for – keep reading to learn the 3 most important numbers to look at that can help you make a data driven real estate decision when you’re buying a home!

The Top 3 Data Points to Look At When You’re Buying a Home

• Days on Market (DOM)

First things first, you want to look at Days on Market. This number refers to the number of days a home has been listed for sale before going under contract.

➡️ Why It’s Important: Days on Market can give us a tonnnnn of insight about a home before you ever even set up a tour. This number alone gives insight into how desirable and competitively priced a home is.

For example, a low DOM typically means the home is in high demand, while a higher DOM may indicate that buyers are hesitant due to price, condition, or other factors.

➡️ What It Means For You As a Buyer: As a buyer, you want to pay attention to DOM because it can give you negotiating power and insight to the seller’s mindset. 

For example, if a home has been on the market for a while, it’s often an indicator that the home isn’t selling for some reason and it can give you an opportunity to negotiate a better deal. 

For this to work, however, it’s important to know what the average DOM is for your area. This information is something that your realtor can help you determine and navigate the negotiating conversation. 

Oftentimes when a seller is coming close to or is already past the average DOM for their area, it’s common for them to start offering price reductions. 

On the flipside though, let’s say the DOM is pretty high and the seller has yet to reduce the price at all. This is also insightful for you as a buyer! It could convey that they don’t necessarily have to sell and they’re just testing the market. 

Overall, looking at Days on Market is one of the first things I do as a realtor and I use that number to influence how clients approach the opportunity. When you’re browsing for homes, you can do the same thing!

• Current List Price

Next up, it’s important to look at the actual list price of the home, which is simply the number that the seller is offering the home for sale. 

This number is the starting point for negotiations and is often based on market analysis, recent sales, and the home’s condition.

➡️ Why It’s Important: While the list price is a key reference point, it doesn’t always reflect the home’s actual market value. Some homes are priced aggressively to generate multiple offers, while others may be overpriced and sit on the market longer.

➡️ What It Means For You As a Buyer: Understanding whether a home is priced appropriately can help you make a strong, competitive offer without overpaying.

But even before buying the home, it can give you an edge to approach the seller with a data driven conversation in the instance that they’ve overpriced their home for the area. 

Again, this is where working with a trusted, local realtor is going to come in handy because they can run an in-depth market analysis to give you a more clear picture of whether or not the home is a fair deal. 

For example, in Billings, MT our average price point for single family homes is around $400,000 and this accounts for 50-56% of our sales. Knowing this information, my clients can approach their home search with more knowledge of what’s “normal” and what’s not. 

Now, with that said just because a home is priced over the average number for the area, it doesn’t automatically mean that it’s priced unfairly.

There are a lot of different factors that determine the list price in addition to the comps, including:

• location – one of the most significant pricing factors is location. Desirable neighborhoods, proximity to good schools, shopping, parks, and low crime rates can drive prices higher.

• market conditions – as always, the overall real estate market will impact the list price of a home. In real estate we have a seller’s market, buyer’s market, and a neutral market, all of which have to do with supply and demand. Low supply with high demand = higher prices. High supply with low demand = lower prices. 

• home size – list price is often calculated based on price per square foot, but usable space matters too. For example, an open floor plan may be worth more than a larger home with awkward spaces. Finished basements, attics, or additional living areas also impact price.

• home condition and upgrades – homes that have been recently renovated, have modern finishes, or include energy-efficient features tend to have higher list prices and any major updates like a new roof, HVAC system, or updated kitchen and bathrooms can add significant value.

• seasonal trends – generally speaking, you’ll see higher prices in the spring and summer months.

• home or area amenities – if the home features mountain views, recreational water access, or has a walkable neighborhood, you’ll often see a higher list price.

Overall, it’s important to understand the average list price for your area because that can give you a gauge to look for when you’re browsing to buy AND know that various things determine the list price of a home. 

• Price Reduction History

Lastly, you want to look at price reductions, which occur when a seller lowers the original list price in response to market feedback or a lack of offers.

➡️ Why It’s Important: Multiple price reductions can tell you that a home was initially overpriced or that the seller is becoming more motivated to sell. This could be a sign that there’s room for further negotiation.

➡️ What It Means For You As a Buyer: If a home you’re interested in has had one or more price reductions, it’s worth investigating and asking why.

Is the seller simply adjusting to the market?

Was the home initially overpriced?

Is there an issue with the property

Understanding the reason behind price drops can help you determine whether it’s a good opportunity or a potential red flag.

Beyond the actual price reduction, though, it’s also important to pay attention to when the price reductions happened because that timeline can be super insightful as well!

For example, most price reductions won’t happen until the home has been on the market for the average DOM of the area. 

So, let’s say a home was listed 2 weeks ago and it already has one price reduction. What does this tell us? It can mean different things, but from a realtor perspective this might tell me that the seller wanted a list price that the agent didn’t necessarily agree with, so they tried it, but it didn’t work so they went ahead and dropped the price to match the market. 

On the other hand, let’s say a home has been on the market for about 45 days or so and they’ve yet to offer a price reduction. In this instance, you could maybe gather that they’re getting ready to do so or would be open to a lower offer. 

Additionally, you might see that a home has been on the market for over 90 days and they’ve offered multiple price reductions, but it still hasn’t sold. What gives? Multiple factors could come into play here, such as location, outdated home features, or something could actually be wrong with the property. 

In this instance, it could warrant a good deal for you as a buyer depending on the situation.

Overall, price reductions, and more importantly, when the price was reduced, can give you a lot of insight about a home before you ever even jump into conversation about it!

How I’m Using This Data With My Real Estate Clients in Billings, MT

So, now that you know the top 3 data points to look at when you’re searching for homes, I want to give you a little insight as to how I personally use this data with my clients in Billings, MT. 

As mentioned, when working with buyers one of the first things I do when we’re actively searching for homes is pay attention to: Days on Market, actual list price, and price reductions. 

THEN, once I’ve gathered that data and dissected all of it, I start looking at different options my clients have in order to get them the best deal for their personal situation. 

In the current real estate world, I’m seeing more and more people becoming more accepting of the interest rates and understanding that they just are what they are and they aren’t going anywhere. 

But with that, the conversation is shifting to, “what else can we do?”

Essentially buyers want to know: If this is going to be our interest rate, what other options do we have to make this feel doable?

And I’ll be the first to tell you that YES, there are options and those options come down to this DATA!!!

The data will tell us if you’re in a spot where you can negotiate and if you CAN, then we can discuss what’s more important to you as a buyer. 

Is it saving money up front? Is it saving money in the long run with your payment?

Navigating these questions can help me as a realtor determine your best negotiation tools. Recently, the most common options I’m using are rate buydowns, asking for closing costs to be paid for, or simply offering a lower price. 

The negotiation tool that you choose is going to give you a different outcome. 

For example, if you really love the house, but you know there’s some renovations you want to do, you might value saving money up front, so asking for some closing costs to be paid for makes more sense.

But if you have a solid savings and aren’t really worried about your money out of pocket, you might be more interested in a lower monthly payment. If that’s the case, we might negotiate a rate buydown or a significant amount off the price.

Overall, the data helps guide us on knowing what’s best for you and being able to match whatever deal you need to the property that you find. 

Ready to Make a Data Driven Real Estate Buying Decision?

Ultimately, it’s important to understand that there is a ton of psychology behind the numbers that you see in real estate.

While it might seem overwhelming at first when you’re just glancing at numbers on a screen, there’s truly so much to learn simply by looking at Days on Market, the actual list price, and by looking at home many price reductions they've taken.

My hope is that through this blog post you have more clarity on what those numbers mean and how you can use them to your advantage, but as always, you don’t have to navigate this alone! 

If you want to be a homeowner in 2025 and you happen to be searching in Billings, MT, I’m here to help. CLICK HERE to connect so we can work together to find the home that’s best for you and we can make a data driven decision that gets you the best deal. 👏🏼

And if you aren’t local to Billings, good news for you – I know people! Send me a message and I’ll get you in touch with a trusted agent in your area to start the home buying process with ease.