Trends
The Importance of Trends
We want our clients to be informed and knowledgeable.
Our agents leverage market data to answer questions like, “Is this a good time to buy?” or “Is this a good time to sell?” We want our clients to make decisions that will both benefit them financially and enable their quality of life.
Trend #1
Months of Inventory
The inventory of available houses is one of the most key indicators of market balance. When inventory is low, prices tend to rise. When inventory rises, price acceleration tends to slow.
Inventory is measured in months of available homes, meaning if no new homes were brought to market, then how many months do we have until all of the available inventory is absorbed. Its computed by looking at the prior month’s sales and dividing into the number of available listings –– meaning that both supply AND demand can impact the metric.
QUICK Tip
6 to 8 months of inventory is considered to be ‘balanced’ and will generally allow for moderate price appreciation.
When inventory levels creep down to 3 months or less, look for rapid price appreciation, shorter marketing times, and increased instances involving multiple offers.
Trend #4
10 Day Sales
The speed at which homes sell is a defining characteristic. Our 10 Day Sale chart illustrates what percentage of homes come to market and are absorbed in less than 10 days. The higher the percentage of homes that are being absorbed quickly, the stronger the buyer side demand is.
Please note that this chart tracks the days from which the home is listed as ACTIVE (available) to the day the status in MLS changes to PENDING (under contract). During the 10 day window, many things happen – several days of showings, a contract review period, a day or two to secure all of the necessary signatures, and a day or two before MLS is updated to show the status as PENDING. In other words, a home that sells in less than 10 days in MLS is pretty much an immediate sale that likely meant multiple offers and/or a sale price in excess of the listing price.
QUICK Tip
Do not assume that if 45% of homes are selling in 10 days that you can wait for 9 days before touring the home –– and then wait a few additional days before submitting an offer.
A home that ‘sold’ in 10 days in MLS most likely sold in 2-3 days, yet it took up to 10 days to complete negotiations, secure the signatures, and update the status in MLS.
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