In Real Estate it’s also Price, Price, Price
August 3, 2012
Location, Location, Location. Those are words we associate with real estate. Have you ever thought it may also be Price, Price, Price? You know that real estate conditions can vary by geographic location, however conditions can also vary by price range.
Just take a look at the below numbers. This table represents months of inventory, the amount of time it would take to sell the current listing inventory at the current sales pace, by price range for both the Tucson and Phoenix metro areas.
For reference, 5 to 6 months of inventory is considered a “normal” market, meaning a balance of supply and demand. Below 5 months is considered a seller’s market, and above 6 is considered a buyer’s market.
You can see how competitive the housing market has become in both areas. You can also see in Tucson that below $275,000 the market is very tight with only 2 to 4 months supply, in Phoenix that dynamic exists all the way up to $600,000.
What does this mean for you? If you are a buyer you should consider how competitive the market is when making an offer. If you are a seller, look at where your price is and use this information to help develop your pricing strategy. If you are a homeowner and considering selling, now may be the time to put your home on the market given the high demand and lack of inventory.
|Price Band||Tucson Months of Inventory||Phoenix Months of Inventory|
|$1 - 49,999||1.9||1.8|
|$20,000 - 74,999||1.9||1.9|
|$75,000 - 99,999||2.1||1.8|
|$100,000 - 124,999||1.3||1.8|
|$125,000 - 149,999||1.4||2.0|
|$150,000 - 174,999||1.9||1.7|
|$175,000 - 199,999||3.0||2.5|
|$200,000 - 224,999||2.3||1.9|
|$225,000 - 249,999||4.3||2.4|
|$250,000 - 274,999||4.1||2.3|
|$275,000 - 299,999||5.6||3.0|
|$300,000 - 349,999||5.3||2.9|
|$350,000 - 399,999||5.0||3.3|
|$400,000 - 499,999||8.2||3.4|
|$500,000 - 599,999||7.5||4.0|
|$600,000 - 699,999||7.5||4.7|
|$700,000 - 799,999||12.8||4.8|
|$800,000 - 899,999||44.0||8.2|
|$900,000 - 999,999||14.0||6.4|
|$1,000,000 - and over||34.8||12.3|
These statistics are based on information obtained from the TARMLS and ARMLS using Brokermetrics software on 7/5/2012. Information is believed to be reliable, but not guaranteed. Months of Inventory (MOI) re?ect the time period required to sell all the properties on the market given the number of closed transactions in the preceding month, provided no new product becomes available. This is an excellent benchmark to show the velocity of transactions in relation to the market inventories. This measurement is a broad one and will vary (in some cases dramatically) by price range, location and type of property.
This is not intended to solicit a currently listed home.