Basic Real Estate Terms - "Housing Inventory"

Dated: 09/06/2018

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Realtors often use terms that make complete sense to them but mean nothing to their clients. Over the next few weeks, I'm going to try to break down a few of the terms you often hear into simple, basic terminology to empower you – the consumer, so you have the knowledge you need to make the best possible decision regarding the Sale or Purchase of a home.

The first of these terms is "Housing Inventory." Inventory is nothing more than a measure of how many homes are for sale. Basically, “Months of Inventory” is a measure of how fast all the existing homes on the market would last assuming a) no more listings are added, and b) the rate at which homes sell is a constant figure based on the average of the last 12 months of sales.

For example, in Loudoun County VA, the current Housing Inventory is 1.8 months. What that means is assuming there were no more homes listed for sale, and the current sale of homes on the market remained as it has over the last 12 months, there would be no more homes for sale 1.8 months from now.

So why is this important? Based on the theory of Supply and Demand, typically the greater the inventory, the lessor the price, the lessor the inventory, the greater the price. Of course, there’s much more to it than simply “price,” but understanding these kind of analytics helps you (the consumer) position yourself to formulate the best strategy required when either selling or buying a home.

As your Realtor, I make it a point to study ALL the analytics of the housing market - one of the many reasons why my clients consistently walk away with more money in their pockets when selling homes and why they often buy homes with equity already in them. Understanding these analytics gives you an edge on the competition when it comes to the Sale or Purchase of a home and puts you at an advantage when it comes to getting the most “Bang for your Buck.”

If you’d like more information, call me at (571) 242-3668 or in Illinois, (815) 556-2708. Remember: “Knowledge is Power,” but you need to know where to get it.

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Jim Trautz

Hello, and welcome to my website! I am a highly-respected leader with demonstrated success spanning the Government, Corporate and Non-profit sectors. By way of background, I spent more than 20 years ....

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