Just in! Your Monthly Real Estate Report Card for March 2021 in Montgomery County.
Are we really experiencing an inventory issue or is it a problem of speed? Watch to learn more:
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Months of Supply (also known as “Months Supply of Inventory”) tells you how many months it would take for all the current homes for sale on the market to sell, given the sales rate for that market. The SmartCharts calculation takes into account the seasonal fluctuations of selling activity by applying the average sales rate of the prior 12 months. 4 to 6 Months is generally considered a balanced market; less than 4 months a sellers’ market as there are more buyers than homes available; more than 6 months can be considered a buyers’ market as there are more homes for sale than buyers to purchase them.
Absorption Rate (New Pendings)- The absorption rate based on new pendings is the rate at which homes are going to contract in the most recent month relative to the number of active listings at month’s end. The Absorption Rate based on new pendings will often be higher than the absorption rate based on sales, particular leading into the spring market. This is due to the normal 1-2 month lag between contract and closing and the fact that not all new pendings ultimately close.
Absorption Rate (Closed Sales)- The absorption rate is the rate at which homes are closing in a given area during a given time period. The higher the absorption rate, the faster homes are selling relative to supply. Absorption rate (closed sales) is calculated by dividing the number of closed sales in a given month by the number of available homes for sale at month’s end. It is the inverse of months of supply based only on one period’s sales count (rather than the 12-month average pace as applied to months of supply). Generally speaking, an absorption rate above 20% is considered a seller’s market as it translates to 5 months of supply.
Median SP to OLP Ratio– The Median Sold Price to Original List Price Ratio for home sold in a given period. This represents the middle ratio of the gross sales price to the original list price across the series.
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