What Does This All Mean?
Buyers or Sellers Market
Whether you are thinking of buying or selling this matters. You probably have a general idea that a buyers market means buyers have the upper hand and sellers market the opposite. But how do we come to this conclusion and how do we know if things are changing? Of course realtors do not have a crystal ball but in a strange way we are in the future and can offer insight that others can’t.
RE stats are a lagging indicator, meaning the information is from the recent past. By the time most statistics come out things have already changed. The average sales price is based on closed sales. This means that at least one month but usually more like two months have gone by from when the house went under contract. The price is agreed upon and locked in at that date but the closing doesn’t officially occur until the loans and paperwork are completed. And let me tell you two months in real estate is an eternity.
Back to the buyers vs sellers market question. Realtors like this stat because it is in real time. This statistic is about what is currently on the market and it is not only calculated on a national level but a local one. As you can see from my photo this stat from March is based on my local market of Manatee and Sarasota county. They calculate how many months supply of inventory we currently have on the market. In this case 2.9%. While it does show that this is up from the recent past, this number is still very low. The less inventory available the more of a sellers market it is.
A stable market is considered 6 months of inventory. When we have that level of inventory then the market is balanced between buyers and sellers. If the inventory goes above the 6 months then we have a buyers market. This indicator helps us to better advise our buyers and sellers.
The other statistic that helps us navigate through the ever changing market is the average time to contract. This number tells us how long a house is staying on the market before going to contract. During the peak of the sellers market last year homes stayed on the market for a few days! This of course caused the multiple offers and crazy bidding wars. The longer market time gives all of us, agents included, a little breather.
The other reason a seasoned agent is so important is that we are the boots on the ground. We are the first to know when the market gets quiet. We are the ones who are sitting at an open house where no one shows up. Or when as a buyers agent we can schedule a showing for next week instead of having to get in that minute. These are the things we see and keep us on the pulse of the market.
The average person can look at stats all day long but your agent is the key person to look to for guidance. Everyone has a story about their agent, good and bad, but we only succeed when you do. Find an agent you are comfortable with, make sure they know what they are talking about and then trust them. Let them help you achieve your goals.
