Absorption Rate, Month's Inventory, Month's Supply: This is the amount of inventory on the market. It is how long it would take to absorb all the inventory in a particular market if sales rate is stable and no new listings come on the market.
DOM: Days on Market
Listings: Active listings available on the market. All of my market reports use MLS information and no FSBO, New Construction or MANU. Information is deemed reliable but not guaranteed.
Median Price: This is the price derived as being the "middle" price. Half of the prices are lower, half of the prices are higher.
Sold: Amount of sold listings during date listed. This means the property is funded, recorded and CLOSED.
Under Contract: Pending Sale with or without Contingencies
What is the best index to determine change in a market?
All variables of LOCAL economic indicies can determine change or shift in a real estate market:
- Population Growth/Decline
- Housing Supply & Demand
- Availability of Jobs
- Availability of Loans to finance homes
- Rental Supply/Demand & Price
- Housing Inventory Levels (amount of listings increasing or decreasing)
- Housing Price Appreciation/Depreciation
- Housing Absorption Rate
- Housing Pendings
- Days on Market
Currently the two most important factors to determine an immediate market change are Pendings and Absorption Rate.
Pendings determine future closes and if listing levels remain steady, you will see a future rise or fall in the Absorption Rate.
Currently this is how I define the market
- Seller or Landlord's Market: 0-4 Month's Inventory
- Neutral Market: 4-7 Month's Inventory
- Buyer's Market: 7-12 Month's Inventory
- Depressed Market: 12+ Month's Inventory
This is what you can expect with the types of Markets (traditionally):
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Seller's Market: Multiple offers, few to zero seller concessions, slight appreciation w/ prices being driven up through multiple offers, low marketing times (when home is priced correctly!)
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Neutral Market: Market sold prices near list, some seller concessions, very little appreciation. Expect longer market times (than Seller's Market) when home is priced correctly.
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Buyer's Market: Sold prices considerably less than list prices, lots of seller concessions, slight depreciation or no movement in prices at all. Very long market times even if home is priced well within the market ranges.
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Depressed Market: Nothing is moving because price corrections must happen. Large amounts of seller concessions and a correction is on the way! Some anomolies to this theory is our short sale market: they can sell but the banks are not approving the prices!
No matter what, you need to make sure you understand what type of market you are selling or buying or renting in to understand where you should price your home or your offer at: if you really want it to sell or really want to buy or really want to rent!
Expect to see a new change to my market report graphs coming up in December 2008! They are easier on the eyes. I switched from google graphs:
To making my own in Excel:
If you have any questions or need clarification regarding my market reports, please email me.
If you would like your own neighborhood to get a yearly report, email me also!
Renee@ReneeBurrows.com
I am always up to listening to new ideas and improve the way I do things!
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Check your inbox girl! Thanks for sharing--I love your new format!