When you go to sell your home, your listing agent will probably mention something about how much inventory is on your local market. Depending on your agent and your level of interest in the gritty details of what goes into selling a home, they may not explain what this means or how it will affect your experience as a seller. We wish more Real Estate Agents would educate their clients on this!!!
Knowing what is going on in your local market and what to expect when you list your house for sale can have a huge impact on your expectations and home selling experience. Unfortunately, not all homes sell right away.
As the seller, this can be more than just a bit frustrating. You need to sell your home. No one is offering to buy it. It’s a perfectly good home – what’s going on here?
Selling anything – houses, cars, even shoes – is about supply and demand. When the supply goes up, demand drops, as do prices. When the supply decreases, meaning there’s less available, demand increases and prices rise.
In Real Estate, inventory is the number of homes currently available for sale in your area. Say there are 100 homes currently on the market, and only 10 sold this month. That means there are another 9 months worth of inventory still available. This results in a buyer’s market, which means that sellers may have to accept less money if they want their house to sell quickly.
Conversely, if there are 100 houses on the market, and 30 sold this month, there is less than 4 months worth of inventory available. This is called a seller’s market, and it can result in homes receiving multiple offers, meaning the home has the potential to sell for more than the listing price. While this is what we like to see, it may not be a realistic outcome in your area.
That’s why a good agent will take the time to educate you on the current market conditions in your area. Being prepared and knowing what to expect between listing your home and getting that “sold” sign can make selling your home a much less frustrating process.