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You may have seen me post market updates before, but what do they mean? Maybe it just looks like a lot of numbers and honestly that is what they are! Once you understand those numbers, you can use them to your advantage. You can use those numbers to decide if now is the right time to buy or sell.
Market updates can be ran as often as you’d like. If you want to see how a certain zip code is doing during a week, we can look it up! If you are curious about a specific city during a month, we can do that too! Market updates allow us to see any given data in a certain area over time.
I have detailed some of the most common data you will find on a market update below.
For Sale
This number tells you how many homes are currently listed in any given area. This is different than homes that have sold, homes that pended, and new listings in the area.
New Listing
This is the number of homes that were new to the market. These homes have not been sold or have not had a mutually accepted offer.
Sold
This is the number of homes that have actually closed in any given period of time.
Pended
This indicates the number of homes that have had mutually accepted offers but have not actually closed yet.
What is the difference between sold and pending homes? Homes that are pending have been mutually accepted by both the buyer and the seller but, are waiting on terms of the offer to be fulfilled. Most homes won’t actually close for 30-45 days from the time an offer was mutually accepted. During this time there is still a chance that offer will fall through by the way of buyers (or sellers) getting cold feet about the purchase, terms not being fulfilled, or contingencies not being met. Once a home is sold, it has closed, and the seller receives their funds!
Months of Inventory
Months of Inventory is a measure of how fast all the existing homes on the market would last assuming that no more listings were added and the rate at which those homes sell is constant.
Average Active and Sold Price
The average is the number obtained by dividing the sum total of a set of figures by the number of figures. For example, if there were 5 houses currently active in your area, you would add up the sales price of all those homes and divide by 5 to get the average active sales price. It is the same concept for sold price, just use the sold price instead of the list price.
Median Active and Sold Price
The median list price differs from the average price and can be much lower. The median price is obtained by taking the price of all the homes and using the middle price. For example, if you have 5 homes on the market in your area and they are listed at $350k, $375k $450, $475k and $500k the median price of those 5 homes would be $450k.
CDOM
CDOM stands for cumulative days on market. This number is important because it shows how quickly homes are active before they go pending. If a home has been on the market for a long time, it can indicate that the home may have issues or more commonly, has been overpriced.
Sold / List Diff %
This number shows you the difference in purchase price versus the list price in terms of percentage. If a home sold for 100% of its value, that means it sold for the original list price (or very close). If you see 99.9% or less, that means it sold for less than the listed sales price and 101% or more means it sold above list price.
You most likely will not see all of these items listed on your average market update, however they can be there. If you have more questions or want a market update for your area don’t hesitate to reach out! This information can be used to show trends of prices in the area to indicate if it might be the right time for you to make a move!
