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Everyone Warned You About This Market. Why Is It Selling in Three Weeks?
•Martin Maxwell•Season 1•Episode 172
There is a warning every new investor hears within about a week of mentioning a cheap market out loud. You'll never be able to sell it. It gets delivered with total confidence, often by someone who has never owned there.
It is worth taking seriously, because the thing it is pointing at is real. There are markets where you buy in an afternoon and spend nine months getting out. It is just pointing at the wrong variable — and the substitution is easy to make, because the two usually travel together.
In this episode of the 5-Minute PRIME Podcast, host Martin Maxwell takes the warning apart on county sales data and shows what actually predicts how fast a house sells — then gives you the single number to look up before you believe anyone.
Tune in to learn:
Where the warning comes from — why "cheap" became shorthand for "illiquid," and the specific kind of market where it is completely correct.
What the data says instead — the county-level figures that put two of the most-warned-about markets in the country near the front of the pack on both days on market and sale-to-list.
The variable that does the work — how many houses actually trade, and why it separates markets that look identical on price.
The ten-minute check — the one figure to pull on any market you are screening, and the thing it cannot tell you.
Have you ever passed on a market because of something you heard rather than something you looked up? Do you know how many houses traded in your target county last month?
Subscribe now to stop inheriting other people's screens.
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Welcome to the 5 Minute Prime Podcast. Quick actionable tips to master personal finance and real estate investing. In just five minutes a day, we'll help you build wealth and achieve financial freedom. Hey Prime Investors, Martin Maxwell here. Welcome back to the 5-Minute Prime Podcast.
Say a cheap market out loud. At a meetup, in a forum, to your brother-in-law, and you will get the warning within about a week. You'll never be able to sell it. Total confidence. Often from somebody who has never owned there. And I want to take that seriously for a minute because the thing it is pointing at is real. There absolutely are markets where you buy in an afternoon and spend nine months getting out. If you have ever tried to exit one, you know that is not a theoretical problem. It is your capital, parked, while the taxes and the insurance and the long guy keep running. So the warning is not stupid. It is just aimed at the wrong variable. And a warning aimed at the wrong variable sends you away from good markets and straight into bad ones that happen to be expensive.
So let's look it up. County level sales data, most recent full month, which is August, covering about 2,900 counties, measuring how long the typical house takes to go under contract, listing to accepted offer. Closing adds a month or so on top of that everywhere. So the comparison holds. The typical American county, right in the middle, runs about 54 days. Now, two of the most warned about markets in the country. The county that contains Detroit, 22 days. The county that contains Cleveland, 25. Those are not mid-pack numbers. Those are near the front. And before anybody says it, yes. Fast can just mean desperate. A house sells quickly if you dump it. So look at what they got. Detroit's county sold at about 98% of asking. Cleveland's 99%. The typical county in the country sold at about 97.5. So they are not selling fast because sellers are running. They are selling fast and holding their price better than the average county in America.
Okay, so is the warning just wrong? No, and this is the part that makes it useful. Sort the same data a second way. Not by price, by how many houses changed hands. Bottom group, the counties where about three houses sell in a month. Median time to sell, about 70 days. Top group, the counties where 320 houses sell in a month, 43 days, 70 down to 43. Straight down the line, every single step. No exceptions in the middle, no bouncing around. And it is not just speed. The same ladder shows up in what sellers actually get. In the thinnest counties, the typical house sells for about 96% of asking. In the deepest, just under 99%. So depth does not only get you out faster, it gets you out closer to your number, which is the part that hits your return. Now sort the same counties by price instead. Cheapest at one end, most expensive at the other. And look for that ladder and how long it takes to sell. It is not there. Fifty-seven days at the cheap end, fifty-two at the expensive end, and the middle groups land in that same narrow band. Five days across the whole price range of American housing. What price does move is what you get. The cheapest counties also sell furthest under asking. But that is a different question from whether you can get out. Sit with that. The variable everybody talks about, what the house costs, does almost nothing to how long it takes to sell. The variable almost nobody mentions is the one doing the work.
So here is the substitution the warning makes. It says cheap, the data says thin. And the reason that swap survives is that the two usually travel together. Most cheap places in this country are also small, and a small place trades a handful of houses a month. Part of that is just size. A big county trades more because it has more houses. But size is what puts buyers in the room, and buyers in the room is the whole thing you need on the day you sell. So if you have only ever met cheap and thin, cheap becomes a perfectly good shorthand, right up until you meet a market that is one and not the other, which is exactly what those two counties are. The county that holds Detroit is in the top 1% of the entire country for the number of houses that trade, and roughly the bottom third for price. It is cheap and it is deep. That is not a contradiction. It is a big old metro with a lot of housing stock and a lot of people moving. And I want to be fair to the warning, because it is dead right about the other kind of market. A county where the typical house is $150,000 and three of them sell a month is genuinely hard to exit. Not because it is cheap, because when you list, there may be no buyer that month. And there is no such thing as a market price when three things trade. We have been here before, on the rent side. A market with only a handful of rentals in it does not really have a market rent. It has the middle of whatever few listings happen to be up when somebody measured. Same disease, different symptom. Thinness does not just make a number unreliable when you are buying. It makes the exit unreliable when you are selling. And if you are listening to this sitting on a property in exactly that kind of county, don't panic, and don't list it Monday because of a podcast. Nothing about your asset changed this morning. What changes is your plan. A wider price band than you would use in a deep market, a longer runway before you need the money, and a realistic answer to who the buyer actually is. Maybe that is an owner-occupant. Maybe it is the neighbor. Maybe it is a rent-to-own deal, a lease option, with the tenant already in the unit. A thin market does not mean no exit. It means the exit is a decision, not an assumption.
Now let me be honest about the limits of what I just told you. Because I do not want you walking away with a new rule that is as lazy as the old one. Across individual counties, this relationship is real, but it is weak. It sorts the typical county, it does not predict yours. And a county is a big place. The number for the county that holds Detroit is not the number for one block of Detroit, because the suburbs are in there too. So look yours up at the finest grain you can get. And there are clear exceptions sitting right in that same list. The county that holds Birmingham trades plenty of houses and costs more than the other two, and it is still the slowest of the group at about 56 days. So this is not buy legacy cities. It is narrower and more useful than that. The variable you were handed is the wrong one, and the right one is cheap to look up. Here is your challenge for tonight. Take whatever market is on your short list right now. Do not look at the median price. You already know it. Find how many homes sold there last month and how long the typical one took. And whether the houses that sold look like the one you would own. Any big listing site has a market page for each county with both numbers, or your agent can pull them in two minutes. If that county trades a dozen houses a month or fewer, you have found something real, and that exit plan we just walked through is yours to write. Before you buy, not after. And if it trades hundreds, then whoever told you that you would never be able to sell it was repeating something they heard. We have said it before, a number the other side hands you is not diligence. A warning at a meetup is that kind of number, except nobody even wrote it down. Put the market back on your screen and run it like any other. The screen you inherit is somebody else's homework. Do your own. I'm Martin Maxwell, this has been the Five Minute Prime Podcast. I'll see you next episode.
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