No matter where you own property, the way to understand the market is to analyze the "metrics." A metric is the technical name for the standard of measurement professionals use to analyze the market activity at any given time (or date range), and for any given place (or market). As sellers, it's crucial to understand the correlation between various real estate metrics - these metrics guide you and your real estate agent to make informed decisions about pricing and timing.
Let's delve into the data and explore how these metrics are interconnected. Throughout this blog, we will be specifically analyzing the 27909 zip code, and using data through the end of September 2023. If you would like metrics specific to your zip code, please reach out to your trusted Hall & Nixon agent. The paragraphs below each image will explain how to interpret the data shown in each graph.
- Months Supply of Inventory: This metric is a key indicator of the balance between supply and demand in the real estate market. A low number indicates a seller's market, where there are fewer homes available compared to the number of buyers. In this case, the months supply of inventory stands at 2.35, suggesting a relatively tight market.
- 12-Month Change in Months of Inventory: This metric shows the percentage change in the months supply of inventory over the past year. With a positive value of +10.8%, this indicates that the market has become slightly more favorable for sellers over the last 12 months. It suggests that the supply of homes has decreased compared to the demand, leading to a potential increase in property values.
- Median Days Homes are On the Market: This is an essential metric for sellers to consider, since it deals with the number of days your house may sit on the market before it sells. In this case, the median days on the market is just 11, indicating a fast-paced market where homes are selling relatively quickly. This can be encouraging news for sellers who want a timely transaction. (Note: On this graph image, the days on market are indicated as "Median Days In RPR.") It is also important to clarify that the reporting shown by this program (taken from our local MLS data) shows the number of days from the listing date to the date the property gets a pending contract - this is NOT the same as the total amount of time it takes from listing until closing (which is usually longer). So, when this graph shows 11 days as the median days on the market, it means that homes spend 11 days actively being marketed before getting an offer and ratifying a contract with a buyer. The length of time from the day the pending contract is secured to the day of closing (when you get your seller proceeds and officially transfer ownership of the home) can vary; usually, in this market, it takes about 14-30 days, depending on whether the buyer is paying cash (shorter) or the deal is being financed (longer). Other factors can always shift these averages to be shorter or longer, but we are simply reporting the average scenario.
- List to Sold Price Percentage: This metric measures the ratio of the final sold price to the listing price. With a value of 100.8%, it suggests that, on average, homes are selling slightly above their listing price. This can indicate a competitive market where buyers are willing to pay a premium to secure a desired property.
- Median Sold Price: The September 2023 median sold price stands at $292,500. This metric represents the middle point of all the sold prices, indicating the overall market value of properties in the area. It's important to note that this is just a median value, and individual property prices may vary based on location, condition, and other factors. We use the median rather than the average so that outliers that sold way below or above most other homes do not drastically skew the data.
Now, let's connect these metrics. The low "Months Supply of Inventory" suggests limited housing supply, which can drive up prices. This is reinforced by the positive "12-Month Change in Months of Inventory," indicating an increasing seller's advantage over time. Additionally, the short "Median Days Homes are On the Market" suggests that homes are selling quickly, potentially leading to multiple offers and higher sale prices.
Moreover, the "List to Sold Price Percentage" above 100% implies that sellers are often achieving prices above their listing price, further indicating a favorable market for sellers. This is supported by the "Median Sold Price" of $292,500, reflecting a healthy market value for properties, and showing the price point that is most likely to sell quickly in this market.
In summary, these real estate metrics paint a positive picture for sellers. Although the market is not as frantic or aggressive for sellers as that of the past two years, the low supply of inventory, increasing seller's advantage, quick sales, prices exceeding listing prices, and a solid median sold price all point towards a market where sellers have the potential to achieve profitable and efficient transactions. The best things a seller can do to sell quickly in this market are: accurate and strategic pricing, professional photography, presenting a clean home that shows well, and remaining flexible with regard to reasonable buyer requests for repairs or other concessions.
