How Many Month of Inventory are in Your Market
Posted in Market Analysis by Doug on August 29th, 2007 One of the first things to do when selling your home is to find out how many months inventory are in your market. Start with your own neighborhood and obtain the following information:
Number and prices of homes activly on the market
Number and prices of homes under contract.
Number and prices of homes sold in the last 6 months
Make a list of the number of homes that went under contract in the last few months. Then divide the number of active homes by the average number of homes that went under contract. Example: 24 homes activly for sale; 3 homes on average go under contract each month. 24 divided by 3 equals 8, or 8 months of inventory.
Make the same calculations for your own zip code to see if your neighborhood is typical of the wider market. Although not part of the months of inventory on the market, use the sales information on homes sold to see how prices are trending and how sold prices compare with the prices of homes on the market.
