31 Jan 3 things Real Estate Experts consider determining if it is a Sellers’ Market or a Buyers’ Market!
1) What is the absorption rate of homes on the market vs homes sold? For example on Friday, Santa Maria had 165 residential homes listed for sale, 87 residential homes in escrow, and in the last 30 days 75 homes closed escrow!* We look at how many homes are on the market, how many have closed and divide closed homes into available homes. This gives us our absorption rate of 2.2 meaning that we have a 2.2 month inventory supply. It’s considered a sellers’ market if there is less than 6 months of inventory and a buyers’ market if we are over the 6 months of inventory.
2) How long do homes stay on the market? A year ago, we were seeing homes come on the market and it would be very common to have multiple offers shortly after the sign went up. Homes that are considered starter homes are taking longer to sell and buyers have time to think before writing their offer and are expecting more for their money. We are seeing longer days on market and price reductions.
3) Another indicator is listed to sale price of a home. Once a home is listed, we see what the final sale price is to determine the market trend. It was common for an offer to be at asking price or within 1%. Now buyers are offering substantially less and some sellers are accepting.
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1*(these numbers are primarily resale homes and a few new homes, but do not include all new construction sales. Information was obtained using the Flex Multiple Listing Service and is for information only).