What Every REALTOR® Wants You To Know About
Months of Inventory
One of the most important numbers in real estate is “Months of Inventory.” The months of inventory is determined by calculating how many months it would take at the current rate of sales to sell all of the homes currently on the market in a given area.
For example: If there are 200 homes for sale in a given area and on average there are 50 homes that sell each month, the months of inventory would be 4 months.
Determining the months of inventory helps determine whether it is a sellers’ market, a buyers’ market or a neutral market. Determining the market is critical in negotiating for both buyers’ and sellers’.
The rule of thumb for determining the market is if there are 6 months or more of inventory on the market it is considered a buyers’ market; 4-5 months of inventory is considered neutral; and 3 months or less is considered a sellers’ market.
As you can see from the chart, it has been a long time since the State of Maryland has been in a sellers’ market. Maryland dipped into a buyers’ market in June, 2016 for one month and then trended back to neutral territory.
Frederick County has a more robust market and transitioned into a sellers’ market in May, 2016 and stayed there until September of this year when the county crept into a neutral market. This information is critical in determining what is right for you.
If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.
As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.