We’re publishing real estate market updates for Sacramento area cities and towns almost daily now, so we thought this would be a good time to provide an overview of what the numbers mean.

Before we begin, let’s get two important disclaimers out of the way:

• As with all the information we provide, what we provide is believed accurate but has not been verified. Consumers should verify all information before making a buying or selling decision.
• In the case of market updates, remember that we’re dealing with averages, not with specific properties. When you’re making a buying decision, you should ask your Plus Team Realtor® to get you detailed comparable data about the specific property you’re interested in, and treat the “average” data simply as background.

Raw market data is provided by our Multiple Listing Service, (the Sacramento Metropolitan MLS, or “SacMetro”). We take statistical information from that source and then analyze it in various ways.

That said, here are some of the terms we use in our market updates and what they mean in more detail:

• Selling price and listing price — The sale or selling price is the price the buyer actually offered and paid for the home, but list price is the price the seller’s asking price at the time the offer was made. In other words, list price might be called “final list price”. If a seller starts out asking $500,000 and gets no offers, then later drops the price to $480,000 and accepts an offer at $475,000, then the list price is $480,000 and the selling price is $475,000.
• Days on Market — This is the number of days between the date the home was listed for sale with a Realtor® and the date an offer was accepted. The total time it takes to sell a home will be longer than the days on market, since once the offer is accepted escrow is opened. A fast escrow runs about three weeks. Thirty days is typical, but sometimes escrows can run longer.
• Inventory — Inventory is simply the number of homes that are active at a given time, divided by the number of homes sold in a given period (we usually use the calendar month previous). For example, if there are 300 homes active for sale on August 23rd, and during July 100 homes were sold, then we say there are three months of inventory to sell. Larger inventories may indicate that the market is cooling, or that sellers are pricing their homes too high. Smaller inventories represent a hot seller’s market.
• Average Price versus Median Price — The average price is simply the mathematical mean (add up all the units sold and divide by the number of units). The median is the dividing point, with half of all homes falling above the line in price and half below.
• Appreciation / Depreciation — When we talk about the price increase from year to year, we’re talking about the difference in average prices from year to year. Since the units offered for sale will be different each year, we also generally tell you what we feel the “real” appreciation is once we’ve adjusted for square footage.

In addition to the general market data we make available as a public service, naturally the Real Estate PLUS Team would welcome the opportunity to help you with your specific property buying or selling needs, and we can provide you with the same careful research and analysis to help you make a sound decision about a specific property.

blog comments powered by Disqus