This episode exposes how default 12-month sell-through rates mask current market reality by blending Q4 2024’s bull market with Q2 2025’s tariff-triggered slowdown, revealing 80% of reviewed properties this week were priced at double appropriate levels. The analysis introduces “adjusted sell-through rates” focusing exclusively on post-April 2025 pending dates to reflect actual current conditions.
Key Takeaways:
- Filter sold comps to three months with pending dates after April 1, 2025 Six-month data includes pre-tariff market conditions; true current performance requires checking pending dates separately from sold dates.
- Active listings outnumbering solds by 5-6x should trigger immediate alarm bells Massive inventory ratios demand either dramatically superior characteristics or significant undercutting—ideally both—to achieve any movement.
- Characteristics of sold comps explain why properties moved in difficult markets Mobile homes, installed utilities, or proximity to townships differentiate successful sales; ignoring these factors guarantees overvaluation.
The full episode details specific market assessment failures and explains why scientific comp methodology prevents the pricing mistakes plaguing 90% of operators.
(Podcast transcript below)
Welcome to Get Serious back here again this week, again on our new three times per week schedule so we can ensure we’re bringing the highest value content to you all, meeting you all as the audience where you’re at, continue to take in the data and ensure that we are working with what it tells us so we can deliver.
what’s working. um, with all of that in mind, you know, I honestly feel like, um, you know, every other podcast, if not every podcast that I record could be related to, um, some type of underwriting criteria for land. Um, because until I see like a much more dramatic improvement for comping skills, um, and ability to assess.
markets You know, I just feel like I need to keep coming back to this again and again and again Yeah, even as I was reviewing deals earlier this week including earlier today And some of these are from some more experienced operators to you know, every week is a little bit different here And and you know, there’s never a point of
shaming anything like that. We’re all trying to run businesses here. Clearly, in our side of the business, all we really do all day every day is underwrite and comp properties. So we don’t expect any other company to be as good at us in that regard, similar to when it comes to direct marketing or phone skills. I wouldn’t purport to say that.
You know, we’re equal in those skills compared to many of your businesses. So yeah, I’m just trying to educate the industry and, know, uh, make sure that, um, we’re kind of clearing out some of these just continued issues with, with comping properties. And we’re not talking like, you know, being off by 10, 15%, like I want to say 80 % of the properties that I reviewed this week.
Like they were off by, you know, 100 percent, meaning that, you know, generally we’re not going to recommend purchasing or funding a property unless there’s roughly 2x gross conservative margin in it. And what I mean is that like 80 percent of these properties sent over to us, we would have cut the anticipated purchase price in half to even get in the neighborhood.
of what we think might work, meaning that, you know, these folks were underwriting these properties at market value and expecting to stay very unrealistic. Exit number, not saying that it couldn’t happen again. You never know what the objective facts are until you put stuff on market and it’s entirely possible we could have been missing some details. We can only work off of what people send over to us.
But a lot of these were just like obvious and glaring mistakes or potential mistakes given hopefully no money left the door outside of, you know, putting your marketing dollars to work and having your team assess the properties. But we all assume that’s kind of, you know, consistent running running costs in in this business. So.
You know, what, what are these, you know, continued common issues here? one I think is, is just like, I think so many folks are just being unrealistic with the current market conditions. And I’m seeing even more data, both bottom up and top down here where I might even be more cautious about the market than even a few months ago. And I know, you know, a lot of folks have.
You know, that I don’t think there’s anybody out there saying, like the market’s just on fire right now and you can sell anything. Like nobody is, is kind of saying that, but, um, now I’ve seen like even more trepidation arguably than we were seeing at the start of April, May, potentially. Um, you know, it’s, I wouldn’t, I wouldn’t say it’s better than that at, at, at best it’s the same. Um,
but we’re seeing some data in certain markets that might even be indicating even more of a slowdown compared to when the tariffs and trade war, et cetera, kicked off a few months, well, really four months back at this point. So that’s just something to keep in mind here. You can’t be cautious enough when considering these markets. And so…
Um, you know, I’ll, I’ll see some of these properties here. And this is really the critical thing. A lot of people will try to pick markets based on sell through rates, et cetera. But the thing is, is that sell through rate as a default, um, will consider the past 12 months of sold data in relation to the active properties. I don’t think that’s a relevant measure right now because the market has.
It’s been about as volatile as you’ll ever see in the land industry over roughly the last 12 months. It was a big bull market end of last year, started this year, and then it got like really hard after that. And so I don’t know what you would call an adjusted sell through rate. Maybe I should trademark that or come up with more catchy name here.
But we’re really again looking back to like the start of q2 of 2025 so, you know, if you’re on Redfin Zilla, whatever like looking at you know that last three months of data I know it’s like a little bit more than three months, you know, that would put us, you know, from the time of the recording like mid-may ish so you could turn on your six-month criteria
But even that I would be cautious about when you’re looking at your sold filter because if you go back to the six month first You’re gonna have stuff that happened prior to Q2 2025 plus I really want to see properties that actually pended After the start of q2, so you might have some solds that were you know, actually sold mid-march even early May
but they pended prior to the start of Q2. So it’s a different market that the actual sold date doesn’t reflect. So that’s a key distinction that a lot of folks won’t necessarily pay attention to here. And so a lot of these properties that folks are selling are sending over to us. I mean, you look at the past three months of data and there might be like one comp that sold maybe a couple, maybe zero.
Then you turn on the actives and it’s just like all over the place. Maybe there’s a couple pending comps too as well So like when when I see that It’s like to me. It’s just like very obvious. Whoa, this this is like a high-risk Market here like we really have to now, you know, look at our characteristics Do we have a much more superior property that we think we could outperform? Okay, what were the characteristics of the sold?
comps that actually sold like what was their true sold price and then we have to like make sure that we can undercut the active market dramatically well I don’t know about dramatically but significant enough to undercut effectively anything on the market unless you just have disgustingly good superior characteristics which rarely people have a lot of people overestimate the quality of their property
Hmm and you know within the land industry it’s it’s again It’s not uncommon to land like the super juicy stuff from a characteristics perspective Because most sellers are going to have You know a firmer grip on on those but not always so just be mindful of that you know, it’s Even as I’m speaking to this now, like it’s a little hard for me to kind of cover this without showing
hard examples here, you know, compared to like when I’m doing a line diligence review, for instance. But you know, lot of these examples, again, were just so glaring to me, or it’s like, okay, you’re sending us this property to be funded, or at least, you know, for consideration for your own purchase, whatever. And you’re telling me that, you know, the price that you think you could expect to sell at
And I’m looking at this market and I’m seeing, OK, maybe one comp on the sold market that actually justifies that price. But oftentimes that’s not the case, and especially within the last three months, that hasn’t been the case. And then I’ll look at the again, the active market and just see so much sitting with varying quality of characteristics across these.
properties that are still anticipated being, you know, to find a buyer and, you know, the price per acres that are sent over to us, like they just don’t make sense. Like they’re either, you know, at the middle or high end of stuff that’s being listed without, you know, accounting for kind of, Hey, this is, this is a really difficult market. You
you need to, again, either have really superior characteristics or be able to undercut everything, ideally both, that’s on the market to get anything to actually move. So again, I feel like I could do this some variation of this podcast. Again, almost every single time that I record here.
because something is still like, I’ve been doing this for years now and like, I still see the same mistakes again and again and again. And like, it’s like, again, comping land, like doing it well across multiple different markets, like it’s a hard skill. takes, you know, we still screw up sometimes when it comes to assessing markets properly, because you know, there’s inevitably gonna be some guesswork.
uh, involved here, um, but you need to estimate carefully, but you know, we’ve developed some more scientific methods over time that limits those mistakes to a much more significant method, um, uh, across any market in, the U S here. And so like, that’s why I can just, you even within five minutes or less than that, sometimes just tell them, like, gosh, like this is just a
You’re gonna get killed in this market if you tried to accomplish this or like again, especially like subdivides and you’re expecting to move like a I don’t know a ton of Child parcels like for instance, we saw this hundred eighty acre play north of Dallas Which first off is like really rough market right now on the on the downtrend massive downtrend, especially for Rezzi lots and
You know expecting to chop those up in like two acres. So you’re looking at like an almost hundred hundred child parcel cut up where you’re have to install roads, etc. And you know basing the per acre pricing on like one maybe two comps that have sold relatively recently and then there’s just a smorgasbord of active comps of varying acreages.
that have just been sitting forever. Characteristics kind of across the board, a lot of them have more superior stuff. I’m like, how is this not registering on how risky of a play this is? And I get it, yeah, maybe you work with a capital partner, not sure how they’re gonna assess it, like, you’re offloading some of those.
just to get a second opinion. like to me, some of these are just like so obvious where it’s, I don’t know what price, you know, in a market like that, you know, yeah, if you gave the property like for free or, you know, payoff taxes or something where I can just like take a, where I can just crazy undercut the, the market so dramatically by like, I don’t know, like 50 % of anything that’s on the active market.
Maybe that would be worth it but to move that much inventory where you have so much working against you Like it just it doesn’t make it doesn’t make any sense I’m not sure how I can be more clear about some of this Except like, know to summarize for now Really look at those last three months, you know recording this in mid-august of
2025 last three months of sold comps specifically Look at look at what’s pending on the market. Yeah, you can extend it out to six months But again, just really make sure that pending date was after April You know start of April of 2025 and then really look at that active market like when when you turn your filter on redfin and Zillow, but do you just see? You know
5 to 6X the number of active listings compared to anything that you’re seeing on the sold or the pendings. Like that should be just alarm bells going off like crazy. And then you have to assess all the pricing and making sure that you can undercut how long days on market, et cetera, et cetera, That is a just key point that will put you ahead of clearly like 90 % of the land industry just by doing that.
And then again, you have to assess the characteristics. Like what are your sold comps showing you? Some of these sold comps, yeah, they have like a newly placed mobile home on the property or maybe they had some utilities installed. They already have a home site, et cetera. So you’re not accounting for these benefits on why some of these properties are actually selling in a more difficult market. And then just, you know, or maybe it’s like much closer to a township or, you know, city center, et cetera.
Like that tends to be more popular right now like the deep rural stuff stuff that was really moving in COVID, know, finding other opportunities just to pick up some land or eventually like vacation home or just move down there. Like it’s just not as popular at the moment, especially in those like typical land flipping states. So I really hope a lot of you guys put more of this into your practice. And if you’re already doing this, you’re like, Chris, I already know how to like.
Then I applaud you. I’m just saying like, until we see this, like be the rule or even happening with, you know, and some of these people sending out, like they run big businesses. Like I can’t, you know, it’s, it’s, if you’re succeeding, great. Maybe you’re just proving me wrong. Excellent. Like keep doing what you’re doing. It’s working. I just,
I think it’s just been like obvious mispricing in this market and probably a reason why a lot of folks are struggling here and getting stuck with things that are not going to sell and just contributing to the problem. I have to get all stressed and not, you know, lowering the, you know, kind of escalated pricing that is, you know, continuing to lead to this, this buyer’s market that is just difficult to,
To operate in so hopefully this is all helpful to you guys Let me know I I’m sure I will return to this again and again and again And I’ll probably write about this this weekend too, so with all that in mind
Appreciate you all listening subscribe and share remember serious land capital for any of your funding needs Land Daily Diligence which I mentioned Facebook groups your cost review of your land deals and Landpricer.ai Which I should mention is Intended to solve these problems like anytime. I’m going through these manual reviews. It’s like It’s gonna be better than me as well to like land prices should just solve
this pricing issue because clearly a lot of folks are struggling in the current tools on the market just are not really addressing this at the level of detail that we need. So just it’s reorienting and reassuring me that we’re heading in the right direction here because it’s it’s a core problem. All right. Take care. I will talk to you on Monday. Have a good weekend. Bye.
