As homeowners, it’s good to know a little bit about the market our home is located in. There are a couple of real estate stats that are good to know as they can give us a feel for the temperature of the market.
1) Medium Price – Both average sales price and median sales price can provide an indication of pricing trends. Median sales price provides a more reliable number because it is not influenced by outlier sales that can sell for unusually high or low prices. However, as with any other stat it’s not good to look at only one metric.
2. Absorption Rate (monthly inventory) – Tied directly to the total homes listed for sale is the months of housing supply statistic. This is a measure of how long it would take to sell out the current inventory of homes given the current rate of sales over recent months without any more homes being added.
3) Total Home Sales – The number of homes sold can provide a good indication of the health of the housing market especially when you compare current numbers to past years. Of course, an increase over past years obviously shows an increase in demand which indicates a higher confidence level in economic conditions such as job stability and credit availability.
4) Days on Market – The number of days it takes to sell a home provides valuable information because it can give an indication of what type of market we have. A longer than normal time on the market most likely indicates higher inventory levels and/or a decrease in demand, which could provide valuable data to sellers. This may help them make a decision on how aggressively they want to price their home.
5) Active Listings- The last stat is total homes listed for sale, which is just another way of describing current inventory. The national news has indicated that inventory levels are down in most areas. In August of 2014, the local MLS indicated that approximately 2,400 homes were listed for sale. As is typical, inventory levels have shown seasonal fluctuation, however, the number of listings in July of 2017 was at 1,693. This is close to 2016 levels but down from 2014 and 2015. With decreases in inventory, you have increases in median sold price and decreases in days on market.
Because real estate is location specific it would be wrong to look at the larger market and assume that the local market is the same. You will get a more accurate picture of the health of your market if you look at the numbers for your specific neighborhood. For more click here.
Norman Hubbard has been in the real estate appraisal business for over 26 years. We have the knowledge and expertise to make things happen with speed and accuracy! Try us today!