Market Data Terms

Market Data Terms

Market Data Terms

Here are commonly used Market Data Terms in the reports to help you understand how they impact your value. It may seem like a crash course in economics, it is. Don’t worry we’re here to guide you every step of the way. source:

Average Sale Price:

The average sale price reported for the month (i.e. total sales in dollars divided by the number of sales).
Economists’ note: Usually, we prefer Median Sale Price over Average Sale Price as a summary statistic for home prices. However, Average Sale Price does have its uses—particularly when it is analyzed alongside the Median Sale Price. For instance, the relative difference between the two statistics provides some insight into the market for higher-end homes.

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Cash Sales

The number of Closed Sales during the month in which buyers exclusively paid in cash.
Economists’ note: Cash Sales can be a useful indicator of the extent to which investors are participating in the market. Why? Investors are far more likely to have the funds to purchase a home available up front. The typical homebuyer requires a mortgage or some other form of financing. There are, of course, many possible exceptions, so this statistic should be interpreted with care.

Cash Sales as a Percentage of Closed Sales:

The percentage of Closed Sales during the month that were Cash Sales.
Economists’ note: This statistic is simply another way of viewing Cash Sales. The remaining percentages of Closed Sales each month involved some sort of financing. Those included mortgages, owner/seller financing, assumed loans, etc.

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Closed Sales

The number of sales transactions closed during the month.
Economists’ note: Closed Sales are one of the simplest—yet most important—indicators for the residential real estate market. When comparing Closed Sales across markets of different sizes, compare percent changes in sales rather than the number of sales. Closed Sales are affected by seasonal cycles. Actual trends are more accurately represented by year-over-year changes, rather than changes from one month to the next.

Dollar Volume

The sum of the sale prices for all sales which closed during the month.
Economists’ note: Dollar Volume is simply the sum of all sale prices in a given time period. It can be calculated by multiplying Closed Sales by Average Sale Price. It is a strong indicator of the health of the real estate industry in a market. Home sellers and home buyers will be better served by paying attention to trends in Dollar Volume (i.e. sales and prices) individually.

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Inventory (Active Listings)

The number of property listings active at the end of the month.
Economists’ note: There are a number of ways to define and calculate Inventory. Our method is to simply count the number of active listings on the last day of the month. Then hold this number to compare with the same month the following year. Inventory rises when New Listings are outpacing the number of listings that go off-market (regardless of whether they actually sell). Likewise, it falls when New Listings aren’t keeping up with the rate at which homes are going off-market.

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Median Percent of Original List Price Received

The median of the sale price across all properties selling during the month.
Economists’ note: The Median Percent of Original List Price Received is useful as an indicator of market recovery. It typically rises as buyers realize that the market may be moving away from them. They need to match the selling price in order to get a contract on the house. Typically the last measure to indicate a market has shifted from down to up, known as a lagging indicator.

Median Sale Price

The median sale price reported for the month (i.e. 50% of sales were above and 50% of sales were below).
Economists’ note: Median Sale Price is our preferred summary statistic for price activity. Unlike Average Sale Price, Median Sale Price is not sensitive to high sale prices for small numbers of homes. Which may not be characteristic of the market area. Median price trends over time are not always solely caused by changes in the general value of local real estate. Median sale price only reflects the values of the homes that sold each month. The mix of the types of homes that sell can change over time.

More information about Cape Coral Market Data HERE

Median Time to Contract

The median number of days between the listing date and contract date for all Closed Sales during the month.
Economists’ note: Like Time to Sale, Time to Contract is a measure of the length of the home selling process. It’s calculated for sale which closed during the month. The difference is Time to Contract measures the number of days between the initial listing of a property and the signing of the contract which led to the closing of the sale. When the gap between Median Time to Contract and Median Time to Sale grows, it is usually a sign of longer closing times and/or declining numbers of cash sales.

Median Time to Sale

The median number of days between the listing date and closing date for all Closed Sales during the month.
Economists’ note: Time to Sale is a measure of the length of the home selling process. It’s calculated as the number of days between the initial listing of a property and the closing of the sale. Median Time to Sale is the amount of time the “middle” property selling this month was on the market. That is, 50% of homes this month took less time to sell, and 50% of homes took more time to sell. Median Time to Sale is a more accurate picture than Average Time to Sale. Average Time to Sale can be skewed upward by small numbers of properties taking an abnormally long time to sell.

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Market Data Terms Guidance is Available

Months Supply of Inventory

An estimate of the number of months it will take to deplete the current Inventory given recent sales rates.
Economists’ note: MSI is a useful indicator of market conditions. The benchmark for a balanced market (favoring neither buyer nor seller) is 5.5 months of inventory. Anything higher is traditionally a buyers’ market, and anything lower is a sellers’ market. There is no single accepted way of calculating MSI. A common method is to divide the current Inventory by the most recent month’s Closed Sales count. This count is a usually poor predictor of future Closed Sales due to seasonal cycles. To eliminate seasonal effects, we use the 12-month average of monthly Closed Sales instead.

New Listings

The number of properties added to the market during the month.
Economists’ note: New Listings tend to rise in delayed response to increasing prices. They are often seen as a lagging indicator of market health. As prices rise, potential sellers raise their estimations of value. In the most recent cycle, rising prices have freed up many potential sellers who were previously underwater on their mortgages. Note that in our calculations, we take care to not include properties that were recently taken off the market and quickly relisted. These are not really new listings.

New Pending Sales

The number of listed property that went under contract during the month.
Economists’ note: Due to the typical time it takes a sale to close, economists consider Pending Sales to be an indicator of potential future Closed Sales. It is important to bear in mind, however, that not all Pending Sales will be closed successfully. The effectiveness of Pending Sales as a future indicator of Closed Sales is susceptible to changes in market conditions. For instance, the availability of financing for homebuyers and the inventory of distressed properties for sale.

These Market Data Terms can make your head spin. Take a look at your local report and break it down one at a time.

We’ll guide you through any that you’d like. We look at this information 7-days a week. We’d love to help you understand your neighborhood and the financial impacts.

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A seasoned marketing professional that sells real estate. His vast executive experience incorporates rock-solid strategic operations and stunning brand development. He manages both Almost Home locations. (Cape Coral, FL, and Westerly, RI). Chris has a healthy obsession with lifelong learning and skill development. As a result, he is a licensed FL & RI REALTOR®, Pricing Strategy Advisor, Accredited Staging Professional, and Real Estate Consultant. Chris is tenacious with the evolution of our distinct concierge services. Thus, his laser focus on the dynamic residential real estate market keeps us two steps ahead of the competition. Making Real Estate, Simplified.

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