Over the last few years we have been providing you with information on the real estate market that we believe is valuable to you and helps aid you in your decision as to whether or not to buy and sell real estate. Also, our thought is it gives you something to talk about around the office, with your neighbors or at cocktail parties!
- But what do all the numbers and terms mean you may ask? Well, here is a quick guide for you going forward. The numbers we quote are for the areas our offices conduct a majority of their business. These areas include Arlington, Fairfax, Prince William, Loudoun, and Fauquier Counties plus all the cities in between like Alexandria, Falls Church, Fairfax, Manassas, and Manassas Park.
- Active inventory or resales are the number of houses for sale where the owners are selling their homes and not a builder.
- Month’s supply of houses is the absorption rate or sales of homes divided into the number of active properties on the market. Basically, if no other houses came on the market, it would take that many months to sell all the houses that are for sale. As a general rule, 6 months is considered to be a balanced market – neither a buyer or seller’s market. Less than 6 months is considered to be a seller’s market and more than 6 months is a buyer’s market.
- Days on the market are the average number of days on the market it takes for a house to sell after going up for sale. Again, typically the fewer the average days on market the more likely it is to be a seller’s market and the longer the average days on market is typically indicative of a buyer’s market. In addition, the fewer the days on the market of a particular home, the more likely the sellers are to receive a full price offer or even multiple offers.
- This brings us to multiple offers. It is what it says. The owners received more than one offer to purchase the home when it was put on the market for sale. How does this happen? Typically it is because of high demand for an area because of the school district, location to commuter routes, shopping, etc. along with the sellers pricing the property properly, getting the home in the right condition and the staging of the house that makes this possible.
- Distressed property inventory are houses that represent short sales and foreclosures. A short sale is when a home owner owes more money on the house than what the house is worth and they are trying to get their lender(s) to approve a sale for less than the amount owed to them. A foreclosure is where the owner of the house stopped making payments and the bank took the property back through a series of steps required by the state and allowed through the deed of trust.
If you have any other questions or concerns about the numbers or the terms discussed monthly, feel free to contact me. As Sy Sims used to say, “An educated consumer is our best customer”.