Percentage of homes for sale v.s. population

Maybe this question is for the realtors out there or the REI’s that have been out in the field for a while. I’m purchasing a property in a community of about 25,000 where there are 96 properties on the market (homes, multi-family, condo’s/townhomes). I live in a community of about 20,000 and there are 363 properties for sale and the town next to me has a population of close to 20K with 228 properties for sale. Is there some sort of ratio (population v.s. properties for sale… or time of properties on the market) familiar to investors or realtors that would dictate when a market is up, down, or sideways? hmmmm

Well, Pauly, since this has hung around for a few days with no response, I will throw in my 2 cents. First of all, it is an interesting question and it shows that you are evaluating your market by doing some THINKING. That will take you a long way in real estate and anything else.

That said, I don’t know that days on market and/or inventory can be distilled to a number or grade which would be a true indicator for your go/no go decisions. Just track those things and use them as part of your decision making process.

Hi Pauly,

It’s good to look at those numbers but not compare community to community. You’ll want to track one community’s numbers today with that same community’s numbers in 3, 6, 9 and 12 months (or if the market cools very rapidly, more often).

It also helps to randomly pick some properties and monitor their particular marketing time. Some of this info is available through the Chamber of Commerce and local real estate offices.

Good luck.

Cate

Thanks for responding. The market that I look in is quite large. A little too large for my taste but it opens up more possibilities and options for me to get into cheaper homes. I’ve noticed that some communities might have less than 1% of their homes for sale while others are approaching the 2% mark. I guess what concerns me more is how long the typical home sits on the market in each of these communities. Heck, if half the homes went on the market and sold within a week then we would have a pretty hot market. Unfortunately I’m looking at one market where a lot of homes are sitting on the market for quite some time and not selling.

I agree that I should be looking at one community at a time and the numbers from that community. The community where I live has rents below mortgage, taxes, and insurance. Ouch.
That market above where homes are sitting on the market for quite some time and not selling have the luxury of having rents above (sometimes well above) mortgage, taxes, and insurance.
hmmmmm