How to Study the Real Estate Market: A Comprehensive Guide
#Study #Real #Estate #Market #Comprehensive #Guide
How to Study the Real Estate Market: A Comprehensive Guide
1. Introduction: The Imperative of Market Study
Alright, let's get down to business. If you're here, it's likely because you've felt that familiar tug – that gnawing feeling that there's more to real estate than just Zillow estimates and "hot market" headlines. You've probably heard folks talk about "the market" like it's some mystical beast, a creature of whims and unpredictable turns. And in a way, they're not wrong. The real estate market can feel like that, a complex, living entity that breathes, expands, and contracts with a rhythm all its own. But here's the thing: it's not unknowable. It's not a mystery novel without an ending. With the right approach, the right tools, and a healthy dose of persistence, you can absolutely learn to read its signs, understand its language, and even anticipate its next move.
1.1 What it Means to "Study the Market"
When we talk about "studying the market" in real estate, we’re not just talking about casually browsing listings or checking your home's estimated value once a month. Oh no, it’s far more profound than that. We're talking about a systematic, ongoing process of gathering, analyzing, and interpreting a vast array of data points to understand the current health, direction, and potential future trajectory of a specific real estate landscape. Think of it less like a quick glance at the weather report and more like a meteorologist tracking a hurricane – observing atmospheric pressure, wind speeds, ocean temperatures, and historical patterns, all to predict where it’s going and how intense it might become. It’s about moving beyond superficial observations and digging deep into the underlying forces at play.
This isn't a one-and-done kind of deal. Real estate markets are dynamic, constantly shifting under the influence of economic tides, demographic movements, policy changes, and even global events. What was true last quarter might be subtly different this quarter, and dramatically altered next year. Therefore, market analysis isn't a snapshot; it's a continuous video stream, requiring regular monitoring and recalibration of your understanding. It involves scrutinizing everything from the number of homes for sale to local job growth, from interest rates to the average time properties spend on the market. It’s about connecting the dots, seeing the bigger picture, and recognizing that every piece of data, no matter how small, contributes to the overall narrative of a market. It's a commitment to staying informed, not just for a single transaction, but for as long as you're involved in real estate, whether as a homeowner, a hopeful buyer, or a seasoned investor.
1.2 Why Market Analysis is Crucial for Buyers, Sellers, & Investors
Look, in any significant financial endeavor, knowledge isn't just power; it's your armor, your compass, and your ultimate competitive edge. In real estate, where transactions often involve hundreds of thousands, if not millions, of dollars, flying blind is not just risky – it's foolish. For buyers, a deep understanding of the market means the difference between overpaying for a property in a declining neighborhood and snagging a future gem at a fair price in an appreciating one. It empowers you to know when to be aggressive with an offer, when to hold back, and when to walk away. You’ll understand the true value, not just the asking price, and you’ll be able to negotiate from a position of strength, armed with data rather than emotion. I remember a buyer who, after diligently studying the local market, identified an area where homes were lingering longer than average, despite strong fundamentals. They used this data to negotiate a significant discount, whereas another buyer, unaware, would have paid full list price. That's the power of knowing.
For sellers, market analysis is equally, if not more, critical. Pricing your home correctly from the outset is paramount. Price it too high, and it sits, accumulating "days on market" like barnacles on a ship, signaling to buyers that something might be wrong. Price it too low, and you leave money on the table – money that could have been yours. Studying the market allows you to understand the true demand for properties like yours, the recent comparable sales, the average time homes are taking to sell, and what incentives, if any, buyers are currently looking for. It helps you time your listing perfectly, knowing whether buyer traffic is peaking or slowing, and whether mortgage rates are making buyers hesitate or rush. It’s about maximizing your return, minimizing your selling time, and crafting a marketing strategy that resonates with the current market conditions, not the conditions of six months ago.
And for investors? Oh, for investors, market analysis is the very air they breathe. It's not just about making a good decision; it's about making profitable decisions consistently. Investors need to identify emerging trends, pinpoint undervalued assets, forecast rental yields, assess risk, and strategize exit plans. They use market data to decide where to buy, what type of property to buy (single-family, multi-family, commercial), when to hold, and when to sell. Without this deep dive, an investment becomes a gamble, a roll of the dice in a game where the stakes are incredibly high. Understanding the market allows investors to mitigate risks by avoiding areas prone to oversupply or economic downturns, and to maximize returns by identifying growth corridors before the mainstream catches on. It's the difference between building a sustainable portfolio and making a series of costly mistakes. Ultimately, for everyone involved, market analysis isn't just a recommendation; it's an absolute necessity for informed decisions, risk mitigation, maximizing returns, and securing a competitive advantage in what can often feel like a very crowded arena.
2. Foundations of Real Estate Market Analysis
Before we start sifting through mountains of data, it’s absolutely essential to get our foundational concepts straight. Think of it like building a house: you wouldn't start framing walls before you've poured a solid slab, right? The same goes for understanding real estate. There are fundamental metrics and market types that act as the bedrock of all subsequent analysis. Without a clear grasp of these basics, the more advanced techniques will feel like trying to solve a puzzle without all the edge pieces. So, let’s lay that groundwork, giving you the vocabulary and conceptual framework you’ll need to navigate the complexities ahead.
2.1 Key Real Estate Market Metrics to Track
When you’re studying a real estate market, you’re essentially trying to take its pulse. And just like a doctor uses several vital signs to assess a patient's health, we use a handful of key metrics to understand the market's condition. These aren’t just abstract numbers; they are the fundamental indicators that tell us whether a market is thriving, struggling, or somewhere in between. Ignoring any one of them is like trying to drive a car with only one mirror – you're missing crucial perspectives.
First up, and perhaps most intuitive, is supply. This refers to the number of available properties for sale at any given time. A high supply typically means more choices for buyers and potentially downward pressure on prices, while a low supply indicates scarcity, often leading to bidding wars and appreciating values. We track this through active listings, new listings, and the "months of supply" metric (which we'll dive into later, but essentially tells you how long it would take to sell all current inventory at the current sales pace). Then, we have demand. This is the other side of the coin – how many buyers are actively looking and willing to purchase. We gauge demand through metrics like sales volume (the number of properties sold), pending sales, buyer traffic, and even the speed at which homes are going under contract. High demand with low supply is the classic recipe for a seller's market, and vice-versa.
Next, pricing is obviously paramount. This isn't just about the median home price, though that's a good starting point. It’s also about price per square foot, average list-to-sale price ratios, and how frequently prices are adjusted (up or down) on listings. These figures tell you not just what homes are selling for, but how aggressively they're selling and whether sellers are getting their asking price. Closely related is affordability. This is a critical, often overlooked, metric that assesses whether the average person can actually afford to buy a home in a given market, considering local incomes and current mortgage rates. A market with soaring prices but stagnant wages will eventually hit an affordability ceiling, slowing demand. Finally, we can't ignore the broader economic health of an area. This is the underlying engine. Metrics like job growth, unemployment rates, local industry diversification, and average wages directly influence people’s ability to buy homes and their confidence in making such a large investment. A robust local economy typically supports a strong housing market, while an economy in decline often spells trouble. These five areas – supply, demand, pricing, affordability, and economic health – form the bedrock of any solid market study.
Pro-Tip: The "Months of Supply" Metric
This is one of the most powerful indicators you can track. It tells you how long it would take to sell all existing homes on the market if no new homes were listed, at the current rate of sales.
- 0-4 months: Strong Seller's Market
- 4-6 months: Balanced Market
- 6+ months: Buyer's Market
2.2 Understanding Market Types: Buyer's, Seller's, and Balanced Markets
Once you start tracking those key metrics, patterns begin to emerge, allowing us to categorize a market into one of three fundamental types: a buyer's market, a seller's market, or a balanced market. Understanding which type you're in is absolutely crucial because it dictates strategy for everyone involved. It tells you who has the upper hand, how negotiations are likely to play out, and what kind of opportunities or challenges lie ahead.
Let’s start with a seller's market. This is often what people mean when they say the market is "hot." In a seller's market, demand significantly outstrips supply. There are more eager buyers than there are available homes. What does this look like on the ground? You’ll see homes selling quickly, often above asking price, and frequently with multiple offers. Buyers might waive contingencies (like inspections or appraisals) to make their offer more attractive. Days on market (DOM) will be low, and inventory levels will be tight, often below 4 months of supply. As a seller, this is your time to shine; you have leverage, can often command top dollar, and might even dictate terms. As a buyer, you need to be prepared to move fast, make strong offers, and potentially compromise on some preferences. It’s a competitive environment, and patience can sometimes mean missing out.
Conversely, we have the buyer's market. This is where supply exceeds demand; there are more homes for sale than there are active buyers. In this scenario, homes tend to sit on the market longer, price reductions become common, and sellers might have to offer concessions (like covering closing costs or making repairs) to attract a buyer. Days on market will be higher, and inventory levels might be 6 months of supply or more. For buyers, this is a golden opportunity. You have more choices, more negotiating power, and less pressure to make a hasty decision. You can take your time, be more selective, and often secure a property below asking price. For sellers, it's a tougher environment, requiring realistic pricing, impeccable staging, and patience. You might not get the price you were hoping for, and you'll need to be prepared to negotiate.
Finally, there’s the balanced market. This is the sweet spot, the Goldilocks zone where supply and demand are roughly equal. In a balanced market, homes still sell, but at a more moderate pace, typically within 4-6 months of supply. Prices tend to be stable, appreciating gradually in line with inflation or local economic growth. Negotiations are more even-handed, with neither buyer nor seller having a significant advantage. Contingencies are generally expected, and while multiple offers can still occur for desirable properties, they are less common. For both buyers and sellers, a balanced market offers a sense of predictability and fairness. It allows buyers time to evaluate options without extreme pressure, and sellers can expect a reasonable sale without feeling they’re giving their home away. Learning to identify these market types is the first step in crafting an effective real estate strategy, no matter which side of the transaction you're on.
2.3 The Local vs. Regional vs. National Perspective
One of the biggest mistakes I see people make when trying to understand real estate is getting caught up in national headlines. You know the ones – "Housing Market Slowing Down!" or "Home Prices Soar Across the Nation!" While these headlines are great for grabbing attention, they often paint with too broad a brush, failing to capture the intricate nuances that truly define your market. Real estate, at its core, is inherently local. What's happening in Boise, Idaho, might be completely different from what's happening in Boston, Massachusetts, or even a different neighborhood within Boston.
We need to differentiate between macro and micro market forces. National trends are the macro forces, driven by things like federal interest rate policies, national employment figures, broad consumer confidence, and geopolitical events. These certainly set a general tone and can influence the availability of credit or overall sentiment. For example, if the Federal Reserve raises interest rates, it will generally impact mortgage rates across the country, making housing less affordable for everyone. However, the degree of that impact, and how local markets respond, varies wildly. A booming tech hub with high-paying jobs might shrug off a rate hike more easily than a struggling industrial town. So, while it’s good to have an awareness of national trends, they should be viewed as background noise, not the main melody.
Then we zoom in to the regional perspective. This might encompass an entire state, a large metropolitan area, or a distinct economic zone. Here, you start to see more specific influences at play: state-level tax policies, major employers specific to that region, large infrastructure projects (like a new highway or public transit line), or even significant natural events (droughts, wildfires, hurricanes) that can impact an entire area. This regional view helps you understand the bigger economic drivers that shape the broader housing market within a specific geographic footprint. It’s a step closer to relevance, providing context for the local picture. For instance, a major company announcing a new headquarters in a certain state will have a regional impact on job growth and housing demand, but the exact neighborhoods that benefit most will depend on proximity and existing infrastructure.
But the real magic, the true insight, happens at the local perspective, or even better, the micro-market level. This is where the rubber meets the road. We're talking about specific cities, towns, neighborhoods, or even particular zip codes. Here, factors like school district quality, local zoning changes, the presence of a new park or commercial development, specific crime rates, or even the reputation of a particular street can dramatically influence property values and demand. A single city can have multiple micro-markets behaving very differently. One neighborhood might be experiencing a surge in demand due to excellent schools and amenities, while an adjacent neighborhood, lacking those features, might be stagnant. These local forces interact with and often override the broader regional and national trends. So, while national data gives you a general idea, and regional data provides context, it's the hyper-local analysis that empowers you to make truly informed decisions about your specific property or investment. Always start broad, then narrow your focus until you're looking at the granular details that truly matter for your specific situation.
3. Essential Data Sources for Real Estate Research
Alright, we’ve talked about what to look for and why it matters. Now, let’s get practical: where do you actually find all this juicy information? In today's digital age, data is everywhere, but not all data is created equal. Some sources are foundational, offering raw, unadulterated facts. Others provide convenient aggregations but might lack depth or carry inherent biases. Knowing where to dig, and understanding the strengths and limitations of each source, is absolutely paramount to building an accurate picture of the market. You need to be a detective, piecing together clues from various reliable informants.
3.1 Public Records: County Assessor & Recorder Offices
When you want the absolute, undeniable truth about a property or a local market, you go straight to the source: public records. The County Assessor's Office and the County Recorder's Office are your goldmines here. These aren’t flashy websites with clickable maps; they’re government entities, and their data is the bedrock upon which much of the real estate world is built. This is where you find the official, legally binding information.
At the Assessor's Office, you can typically access detailed records for every parcel of land and property within the county. What kind of information are we talking about? We're talking about property values for tax purposes (which, while not always market value, give you a baseline), property taxes paid, the owner of record, and often a wealth of physical characteristics about the property itself – square footage, number of bedrooms/bathrooms, lot size, year built, and sometimes even recent sales history. This is invaluable for understanding how a specific property is assessed, what its tax burden is, and who owns it. You can often look up comparable properties in the area and see their assessed values, giving you a sense of relative worth. For example, if you're looking at a house and its assessed value is significantly lower than similar homes, it might indicate an oversight or a recent improvement not yet captured. Conversely, a much higher assessment could mean higher taxes for you.
The County Recorder's Office, sometimes known as the Register of Deeds, is where all real estate transactions are officially recorded. This is where you'll find the actual sales comps (comparable sales) – the recorded deeds showing the actual purchase price of properties, not just asking prices or estimates. You can trace ownership history, see if there have been any liens or encumbrances placed on the property, and understand the full chain of title. This information is crucial for due diligence. If you see a property that’s changed hands many times in a short period, or has a complex history of liens, it might warrant further investigation. While accessing this data might require a trip to the physical office in some counties, or navigating an older, less user-friendly website, the information contained within is typically the most accurate and legally verifiable. It’s the closest thing you’ll get to an undisputed fact in real estate, and it forms the foundation for understanding true market values and trends.
3.2 Multiple Listing Service (MLS) Data for Professionals
Now, while public records give you the official word, the Multiple Listing Service (MLS) is where the real-time action happens, the nerve center for active real estate transactions. However, and this is a big "however," MLS data is primarily for licensed real estate professionals. Buyers and sellers don't get direct access to the full, unadulterated feed, which is why having a good agent is so valuable.
What makes MLS data so powerful? It's a comprehensive database of virtually every property listed for sale by cooperating real estate brokers in a specific geographic area. This isn't just a handful of homes; it's the vast majority of residential properties actively on the market. The level of detail available is astounding: not only does it include all the basic property characteristics you’d expect (beds, baths, square footage, lot size, photos, descriptions), but it also tracks crucial market indicators that are harder to find elsewhere. We're talking about days on market (DOM) for every listing, price changes (you can see if a property has been reduced or even increased), listing history (how many times it's been listed, with what agents, at what prices), and perhaps most importantly, sales history for sold properties, including the final sale price, the date of sale, and often even details about concessions made.
For a professional, the MLS is indispensable for performing a Comparative Market Analysis (CMA). An agent can pull up recent sales (comps) that are truly comparable to a subject property – similar size, age, condition, location – and see exactly what they sold for, how long they took to sell, and what the list-to-sale price ratio was. This level of detail allows for highly accurate pricing recommendations for sellers and helps buyers understand the true market value of a home they're interested in. You can also track broader trends: how many new listings came on the market last week, how many went under contract, the average DOM for a specific zip code, or the percentage of homes selling above or below asking price. It’s a dynamic, constantly updated snapshot of market activity. While you might not have direct access, remember that a knowledgeable real estate agent can be your gateway to this treasure trove of information, making their expertise invaluable for serious market study. Don't underestimate the power of asking your agent for specific data points from the MLS; a good one will be happy to share and interpret it for you.
3.3 Online Real Estate Portals & Aggregators (Zillow, Realtor.com, Redfin)
Okay, let's talk about the big names you probably already know: Zillow, Realtor.com, Redfin, and their ilk. These online real estate portals and aggregators have revolutionized how the average person interacts with the housing market. They've democratized access to a ton of information that used to be difficult to find, and for that, we should be grateful. They are fantastic starting points for casual browsing, getting a feel for neighborhoods, and even doing some initial market research.
These platforms excel at providing publicly available data in an easily digestible, visually appealing format. You can search for homes, filter by price, size, and features, and instantly see photos and virtual tours. Beyond individual listings, they aggregate a wealth of neighborhood-level data: median home values, recent sales, price trends over time, school ratings, local amenities, and demographic information. Zillow's "Zestimates" and Redfin's "Redfin Estimates" are widely recognized for giving homeowners and potential buyers a quick, albeit estimated, valuation of properties. They use sophisticated algorithms that pull from public records, MLS data (where they have agreements), and other sources to generate these figures, offering a convenient benchmark.
However, and this is a crucial point, it's vital to understand their limitations. While incredibly useful, these sites are not always 100% accurate, especially when it comes to valuations. Their algorithms can't account for every unique feature of a home, its exact condition, specific upgrades, or the emotional nuances of a market that a local agent might pick up on. I've seen Zestimates be wildly off, sometimes by tens of thousands of dollars, either because a property has unique characteristics not captured by the algorithm or because the public record data they're pulling from is outdated. Furthermore, the data they display for "sold" properties might sometimes lag behind the official MLS or public records, or they might not have access to all sold data, especially for off-market transactions. They are excellent for getting a broad overview and identifying properties, but they should always be cross-referenced with more authoritative sources and, ideally, supplemented by a local expert's insights. Think of them as a fantastic aerial map, but you still need boots on the ground to truly understand the terrain. Use them for inspiration and preliminary research, but don't base your entire real estate strategy on their estimates alone.
3.4 Government Agencies & Economic Reports (Census, BLS, FRED)
To truly understand the heartbeat of a real estate market, you need to look beyond just properties for sale and dive into the larger economic and demographic forces at play. This is where government agencies and their treasure troves of economic reports become indispensable. These sources provide the macro and regional data that underpin everything else, giving you insights into population shifts, employment trends, and monetary policy – all of which directly impact housing demand and affordability.
The U.S. Census Bureau is your go-to for demographic shifts and population growth. Their data is incredibly rich, offering insights into age distribution, household formation rates, income levels, educational attainment, and migration patterns down to the county and even census tract level. Why does this matter for real estate? Because people need places to live! A region experiencing significant population growth, especially among younger demographics forming new households, is likely to see increased demand for housing, both for purchase and rent. Conversely, areas with declining populations or an aging demographic might experience stagnant or decreasing demand. I often check Census data to see if an area's population growth is sustainable or if it's hitting a plateau. It helps me understand the long-term viability of a market.
Next, the Bureau of Labor Statistics (BLS) is crucial for understanding employment data. The BLS provides detailed statistics on job growth, unemployment rates, wage trends, and industry-specific employment across various regions. A robust job market, characterized by low unemployment and consistent job creation, is a powerful driver of housing demand. When people feel secure in their jobs and see opportunities for career advancement, they are more likely to invest in homeownership. Conversely, high unemployment or job losses in key industries can quickly dampen demand and even lead to foreclosures. Tracking which industries are growing or shrinking in a particular metropolitan area can give you a powerful predictive edge. For example, if a tech hub is seeing massive growth in high-paying tech jobs, you can anticipate increased demand for housing in that area.
Finally, the Federal Reserve Economic Data (FRED) database, maintained by the Federal Reserve Bank of St. Louis, is an absolute goldmine for tracking interest rate trends and a vast array of other economic indicators. Here, you can find historical data and current trends for mortgage rates (like the 30-year fixed-rate mortgage average), inflation, GDP growth, consumer sentiment, and much more. Interest rates have a direct and profound impact on housing affordability and buyer purchasing power. When rates are low, homes become more affordable, stimulating demand. When rates rise, purchasing power diminishes, which can cool down a hot market. Understanding these broader economic currents, provided by agencies like the Census, BLS, and FRED, allows you to put local real estate activity into its proper context and anticipate future shifts rather than merely reacting to them.
3.5 Local News, Industry Publications & Real Estate Boards
While raw data from government sources and MLS is critical, don't underestimate the power of qualitative information and expert commentary. This is where local news outlets, industry publications, and local real estate boards come into play. They often provide the narrative, the "why" behind the numbers, and insights into future developments that might not yet be reflected in the hard data.
Local news sources – think your city's daily newspaper, local online news sites, or even reputable community blogs – are invaluable for staying updated on specific development projects, zoning changes, and infrastructure improvements. Is a new shopping center being built? Is the city planning a major transit expansion? Are there debates about rezoning a large parcel of land from industrial to residential? These kinds of local decisions and projects can have a monumental impact on property values and neighborhood dynamics. A new park or school can boost desirability, while a proposed waste treatment plant nearby might depress it. Local news also often covers stories about major employers moving into or out of an area, which, as we discussed, directly affects job growth and housing demand. I make it a point to skim local business journals and city planning updates regularly; they often contain clues about where the market is headed.
Industry publications and real estate boards (like your local Association of Realtors) offer a more specialized perspective. Publications often feature articles by local experts, economists, and successful agents who share their insights, forecasts, and observations about specific market segments. These can be incredibly helpful for understanding nuanced trends or getting a professional perspective on what the data means. Local real estate boards, beyond providing MLS access to their members, often publish their own market reports, statistics, and analyses tailored specifically to their geographic area. These reports are usually compiled by professionals who are deeply immersed in the local market, offering a level of specificity and interpretation that general national reports simply cannot. They might highlight specific neighborhoods that are outperforming others, identify emerging buyer demographics, or discuss the impact of new local regulations. Joining these associations (if you're a professional) or subscribing to their public reports (if available) can provide you with a significant advantage, connecting you directly to the pulse of the local real estate community and its collective wisdom. It’s about complementing the cold, hard numbers with informed, human-centric insights.
Insider Note: Don't Discount the Rumor Mill (with caution!)
While not a "data source" in the traditional sense, local chatter, community forums, and even casual conversations with long-time residents or local business owners can sometimes offer early warnings or insights into developing trends before they hit official reports. Just remember to treat these as anecdotal evidence and always verify with hard data. But sometimes, a whisper about a new factory or a planned rezoning is the first sign of a big shift.
4. Analyzing Key Market Indicators
Now that we know where to find the data, it's time to roll up our sleeves and actually analyze it. This is where we move from data collection to insight generation. Each piece of information we've discussed isn't an island; they're interconnected threads in the complex tapestry of the real estate market. Understanding how to interpret these indicators, both individually and in relation to each other, is the core skill of a market analyst. We'll break down the most critical indicators, showing you how to read their signals and what they truly tell you about the market's health and direction.
4.1 Supply-Side Analysis: Inventory, New Construction & Days on Market
The supply side of the equation is often the first thing people notice, even subconsciously. You see a lot of "For Sale" signs, or very few. But there's more to it than just a glance. A deep dive into supply involves understanding not just how many homes are currently available, but how quickly that inventory is changing and what kind of new supply is entering the market.
First, let's talk about active listings. This is the raw count of properties currently on the market. Tracking this number over time is fundamental. Is it trending up or down? A rising number of active listings, especially if sales volume isn't also increasing, suggests a shift towards a buyer's market. Conversely, a shrinking pool of active listings points to a seller's market. But merely counting isn't enough; you need context. That's where new construction comes in. Tracking building permits issued and housing starts (the initiation of construction on new residential buildings) gives you a forward-looking indicator of future supply. A surge in building permits today could mean an influx of new homes hitting the market 6-18 months from now, potentially easing supply constraints or even leading to oversupply if not matched by demand. On the other hand, if new construction is lagging significantly behind population growth, it points to long-term supply shortages. I always look at the pipeline of new developments – what's approved, what's under construction, and what's merely proposed. This tells you a lot about future market dynamics.
Then we have Days on Market (DOM), also sometimes referred to as "Median Days to Contract" or "Average Days on Market." This metric is incredibly powerful because it tells you the pace at which homes are selling. A low DOM (e.g., under 30 days) indicates a hot market where buyers are acting quickly and competitively. A high DOM (e.g., 60+ days) suggests a slower market where properties are lingering, giving buyers more time and leverage. It's a direct reflection of buyer urgency and seller negotiation power. You also want to look at the DOM for different price points or property types. A market might have an overall low DOM, but if luxury homes are sitting for months, it tells you something specific about that segment. Similarly, tracking the absorption rate (the rate at which homes are sold in a specific market over a given period, often expressed as "months of supply" as mentioned earlier) is crucial. If there are 100 homes for sale and 20 sell per month, you have 5 months of supply. A healthy, balanced market typically has 4-6 months of supply. Anything
