What are months of inventory and why should I care when buying or selling a home in Turlock or the Central Valley

When it comes to real estate in Turlock or the Central Valley, one of the most important metrics to consider is months of inventory. This metric provides an indication of the balance between supply and demand in the real estate market and can be used to inform your decision-making when it comes to buying, selling, and investing in real estate.

Months of inventory is a measure of how long it would take to sell all of the homes on the market here in Turlock and the Central Valley, given the current rate of sales. 

How are Months of Inventory Calculated?

Months of inventory in real estate is a measure of the supply and demand for homes in a particular market. It is calculated by dividing the number of homes for sale by the number of homes sold during a specific period of time, typically a month. For example, if there are 100 homes for sale and 10 homes are sold in a given month, the months of inventory would be 10 (100 / 10 = 10). A high months of inventory indicates that there is a large supply of homes relative to the demand, which can lead to lower prices and longer selling times. A low months of inventory indicates that there is a high demand for homes relative to the supply, which can lead to higher prices and shorter selling times. Real estate professionals and home buyers can use months of inventory as a general guide to the state of the local real estate market and to help inform their buying and selling decisions.

How does Months of Inventory Indicate if it's a seller or buyers market?

To determine whether a real estate market is a buyers market or a sellers market in Turlock and the Central Valley, it is necessary to consider the supply and demand for homes in that market. In a buyers market, there is a high supply of homes relative to the demand. In a sellers market, there is a high demand for homes relative to the supply. A high months of inventory (more than six months) generally indicates a buyers market, while a low months of inventory (less than six months) generally indicates a sellers market.

Another way to determine the supply and demand for homes in a particular market is to look at the median sale price and the median days on market, which are metrics that provide information on the typical price and selling time of homes in that market. In a buyers market, the median sale price is likely to be lower and the median days on market is likely to be higher, while in a sellers market, the median sale price is likely to be higher and the median days on market is likely to be lower.

Overall, it is important to consider a variety of factors when determining whether a real estate market is a buyers market or a sellers market so be sure to consult with the Core Team for expert advice and guidance.

Why Months of Inventory is Important When Buying or Selling a home in Turlock and the Central Valley?

When the months of inventory is low, it indicates that the real estate market is in high demand and is a seller’s market. This means that there is a limited supply of homes available and buyers are competing to purchase them. In this situation, sellers can generally expect to receive higher offers and have an easier time selling their homes.

On the other hand, when the months of inventory is high, it indicates that the market is in a buyer’s market. This means that there is an abundance of homes on the market and buyers have more options to choose from. In this situation, sellers may need to reduce their asking prices in order to attract buyers.

It’s important to note that the months of inventory is an average measure, and it can vary from area to area. It’s also important to consider other factors in the real estate market, such as pricing trends and economic conditions, when making decisions about buying or selling a home.

Overall, months of inventory is an important metric to consider when evaluating the real estate market. It provides insight into the balance between supply and demand and can help inform decision-making when it comes to buying, selling, and investing in real estate.