Good Question. Every market is different, most times even down to the neighborhood you’re interested in, but right now, good homes are selling extremely fast and you probably don't want to wait if you want to throw your hat in the ring. However, for a more complete answer, keep reading.
What Do The Experts Look At?
The experts normally look at the number of available homes on the market vs. how many homes normally sell each month. When you compare those numbers as an active buyer in the market, you can get a pretty good idea of how fast you need to move and how aggressive you need to be when you find the right house.
Months of Supply or Inventory - The real estate industry often calls the key market indicator, the “inventory” of available homes on the market and measure the inventory by how many months of supply is out there. A general rule of thumb is that anything under 4 months of inventory is a Sellers’ Market, anything 4-6 months is a stable market where neither the seller nor the buyer have an upper hand in the negotiations and a 6+ month inventory of homes is a Buyer’s Market.
Two Factors to Consider
Location is the first factor you must consider, because national levels of inventory are going to differ from local levels of inventory and the local inventory is going to effect your buying urgency the very most. The second factor to consider is the price point. Not all price points are going to have the same level of inventory in a market. For instance, there may be a much greater inventory of homes in the $1 Million+ market, but not nearly as many homes for sale. The reason is that buyer demand is not as high in that area.
In the Phoenix Metro area, the current inventory of homes is at about 3.1 months of supply. But, as I said, that is somewhat deceiving because the current inventory of homes under $300k is at about 1.2 months of inventory. That means, if no one placed their home up for sale for the next 1.2 months, there wouldn’t be any homes on the market at that price point…
The moral of the story is that to act wisely when buying in this market, you need to be armed with the right info. These numbers are always changing and are going to continue doing so.
You can message us anytime and find out what the local market inventory looks like here locally. We love to answer the “How’s the Market…” question (real estate is our jam).
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