We can look at the market trends in this chart to draw some general conclusions about the state of the local real estate market. We can consider the seasonality of the local housing market and how the relative balance between supply and demand changes throughout the year.
Notice the bar chart in the background (using the scale on the left side of the chart) this shows the number of months that it would take to sell all of the inventory currently on the market at the rate at which homes are currently selling. When the bars are taller, this is an indication that there is more supply relative to demand and therefore that there is more of a buyer's market. When the bars are lower, this is an indication that there is less supply relative to demand and therefore that there is more of a seller's market.
Look at the lines that use the scale on the right side of the chart. Notice the red line at the top, this is the number of homes actively for sale at any given time. This tends to peak around September and hit bottom in January or February of any given year. The black line at the bottom indicates the number of properties that sell (closing occurs) in any given month. Closings usually peak in June and hit bottom around January. You can see that more properties sell in the spring and summer, though the peak of sales usually occurs a bit before the peak of active listings. And finally, it is apparent that there are more homes for sale at any given time than actually sell. A little more than half of all homes placed on the market sell and a little less than half of listings expire without the home selling.
One fact to consider, not shown in this chart, is that closings typically occur about 40 days after contracts are finalized. Any given sold property would leave the active listings category and become "pending" or "under contract" for about 40 days, on average, before it shows up in the sold listings category. Another is that properties are typically on the market for about 60 days, on average, before they go under contract which means that the average time between listing and closing is about 100 days.
In conclusion, the past 24 months have generally been a seller's market in our area. A market is considered in balance when the inventory sells in about 6 months. A shorter period than this is generally considered to be a seller's market and a greater period than this is generally considered to be a buyer's market. The vast majority of the months during this time frame have had inventory levels significantly less than 6 months, though seasonally there are slower months around the beginning of the year when the market is closer to balanced conditions.
For more information see this real estate market report for the Columbia, Missouri area, or contact us.
Information is deemed to be reliable, but is not guaranteed. © 2017 MLS and FBS.
Prepared by James C Meyer, GRI, SRS, ABR, Jim & Lisa Meyer, Your 2 for 1 Real Estate Team on 10/12/2017.