We use the term “months of supply” in real estate to tell us how much inventory of homes for sale we have on the market. The months of supply is the time it would take for all the current inventory to sell if it all sold at the current rate without new inventory coming on the market.
But how to calculate months of supply you ask?
Months of supply is the number of houses currently for sale divided by the average number of homes sold per month.
6 months of supply is considered the benchmark for a balanced market. Less than 6 months of supply favors the sellers because there are less choices for the buyer. More than 6 months favors the buyers and leads to lower prices.
In a recent blog post, I show examples of how we use the inventory data and calculate months of supply to learn more about recent trends in the Leavenworth market.
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