The following chart shows the market in relationship to supply and demand. REALTORS watch closely the ratio of the inventory against the pending sales. We know that if the gap between those two sets of data decreases, we cannot be aggressive when working with buyers. A healthy market is where a little give and take on both sides of the negotiation table exists or when roughly 30 to 35% percent of available homes go pending during the same month. As you can see from the below graph we are in a seller’s market.
The average days on market is a great guide for gaining an understanding of how long it might take to receive an offer. You can also see how much of the list price the seller’s are netting as an average.
Use the average price of listings to gauge how confident REALTORS and homeowners are in a market and as a guide for the general direction of housing prices.
Months of Inventory is just another way of looking at the supply and demand ratios. The months of inventory tell us how long it would take to sell every single home on the market if no other listings came on. A neutral market is 4 to 6 months supply, anything more is a buyer’s market and anything less is a seller’s market.