How’s the real estate market? For the experienced professional, this is a not a simple question. The answer can be multi-faceted and depends on one’s perspective. It’s kind of like summer weather in the Midwest. It depends on where you live, which day of the week or even what time of day!
The real estate industry is made up of multiple markets. Are you asking about the residential housing market? Or the residential multi-family market? Single-family homes or condos? Urban, suburban or rural? Even within these definitions, there can be significant variations from state to state, county to county, zip code to zip code or even neighborhood to neighborhood.
This is where as a consumer you have to be careful about how you process and pick through information you may read in the news or even hear while gathered around the water cooler. A great example of this is with pricing. You may have been reading about how inventory is low, prices are rising and homes are selling fast. Keep in mind, most sales and news reports center around median home prices. The median is the middle of where the majority of the activity is occurring. But what if your home is more at the edges of the bell curve? Then reports about median home prices and activity isn’t going to be very helpful.
For example, in La Crosse County, Wisconsin, residential home sales had an average sale price of $226,120. However, the median was $199,900. That’s over a ten percent difference. Months’ supply of inventory for all price ranges is under two months. A balanced market is five to seven months. Sales are hot, right? Well, not so fast. If your home is priced $300,000 and above, months’ supply rises to five months. Priced $400,000 and above, months’ supply rises to 10 months. And this is just one county in the river valley. Again, such market dynamics can vary state to state, county to county and so on.
So how do I know, you ask? What information can I trust? The answer is not what, but who. Just like we all have our trusted weather station or meteorologist, when it comes to the real estate market, turn to your trusted Realtor (aka real estate marketologist).