Here’s An Easier Way To Follow The Real Estate Market

I know that statistics and charts can be a bit mind numbing.  On the other hand, they are the story that we need to know telling us where we've been and where we might be going. 

I like to watch certain stats in particular:  the number of new listings, the number of sales, the number of price reductions but most of all, the sales to listing ratio.  That is perhaps one of the better indicators of what is going on in the market.

Let me explain this little ratio thing.  It's calculated by dividing the number of sales by the number of listings.  It gives us a snapshot of what percentage of the listings on the market are selling.  We look at them both on a monthly (or weekly) basis and also year-to-date.  Although there are divergent opinions, generally speaking, a sales-to-listing ratio of over 50% suggests that it is a SELLERS market.  Under 40% is a BUYERS market and in between, is considered to be a BALANCED market.

Right now, the sales to listing ratio is under 30% as one may expect.  That means less than 30% of properties on the market are selling.  It's clearly a BUYERS market right now.

To simplify this ratio study, I thought it might be a good time to have a pretty chart so you don't have to read and analyze the stats:

Watch the black trend lines.  When they start moving toward each other, that means the market is showing signs of improvement.  Of course, if they move apart, its not such a good thing if you are trying to sell. 

So for all you analytical types out there, I feel your need!  Hope this fills some brain space.