Our Idaho Market Snapshot explained.
As the Idaho real estate market continues to heat up, you’re likely hearing much discussion about the amount of residential housing inventory, or lack thereof. So to better explain the information contained in the Idaho Market Snapshot continue reading below.
What is inventory available or 'months supply of inventory'?
It’s no secret, our Treasure Valley communities have been experiencing an inventory shortage for the last couple years. Basically, there simply isn't enough active listings in our neighborhoods to satisfy buyer's demands.
In a nutshell, these industry terms reflect an estimate on the amount of time it would take to sell all of the current home listings available in a given area if no other new home listings became available to the market at it's current pace.
Does months of inventory help determine if it's a 'sellers market' or 'buyers market'?
Yes, because months of inventory available can help in determining whether it’s a seller’s market or a buyer’s market. To determine what kind of market we are in, we can use the guidelines below to get a better understanding.
These timelines are all approximate. Generally fewer than 6 months of inventory reflects good conditions for sellers. However with greater than 6 months of inventory, conditions are optimal for buyers.
Is 'median' sales price the same as 'average' sales price?
Average sales price is calculated by adding sale prices for homes sold in a specific area within a specified time frame. Next we divide that total by the number of properties sold.
Median means "in the middle". In regard to sales price, this means half of the homes sold are above and half are below this price.
For example, let's say there are 10 homes for sale in a our market at the prices of $150,000, $175,000, $225,000, $325,000, and $575,000. The Median Price would be the one in the middle, or $225,000.
You'll see that this is not the same as Average Price. The average price would be $290,000 which is significantly higher than the median of $225,000. Median is the best indicator for "typical" homes because it's not affected by "the exception" (the $575,000 home).
Why is this information helpful?
When buying or selling your home, this information can be very important. If the market shows a downward trend, it means that sellers most likely are dropping their prices in response to a "cold" or "buyer's" market.
Average Days on Market explained:
DOM refers to the period of time a property is active on the MLS before closing, and becomes legally binding.
Simply put: it’s a measure of how many days a home takes to sell.
