Key Metrics that Shape the Market

Let’s break down the five key indicators that matter the most:

1. Inventory

Inventory refers to the number of homes available for sale at any given time. A lower inventory typically indicates a seller’s market, with many buyers competing for the limited options. Conversely, a high inventory can suggest a buyer’s market, where homes take longer to sell.

2. Days on Market

This metric represents the average number of days a property remains on the market before selling. Fewer days on the market suggest strong demand, while longer durations can indicate issues within the property or an oversaturated market.

3. Median Price

The median price is critical in determining the overall value trends in a market area. It is the middle price in a list of sales, providing a clearer picture than average prices, which can be skewed by outlier sales. Tracking median prices over time can help you understand whether a market is appreciating or depreciating.

4. Sale-To-List Ratio

This ratio offers a comparison between the final sale price and the listing price. A sale-to-list ratio greater than 100% indicates that homes are selling for more than their listed price, often seen in a hot market. Conversely, a lower ratio may signify a need for price reductions or an oversupply of homes in the market.

5. Interest Rates

Interest rates play a pivotal role in the real estate market, directly affecting buyers’ purchasing power. Higher interest rates can suppress demand, while lower rates tend to encourage buying activity.

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