12 Real Estate Market Terms that Make You a Better Consumer

Here are 12 real estate market terms that will make you a better consumer:
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If you’re a first-time home buyer, or even if you’ve been in the business for a while, learning real estate terminology can be a hurdle. Pair these terms with graphs and numbers, and we wouldn’t blame you if your eyes glazed over. 

However, mastering real estate doesn’t have to be hard. Each metric included in the upcoming Beverly-Hanks Quarterly Market Report represents important information to help you make the right financial decision during your next real estate transaction. Acquaint yourself with these definitions from our QMR glossary so you can understand the value of these real estate market metrics.

Here are 12 real estate market terms that will make you a better consumer:

Active Days on Market (ADOM)

The average amount of time the current supply of homes has been on the market. When considered alongside Closed Days on Market (CDOM), the metric can describe whether existing inventory matches buyer preferences and the general direction of the market.

Closings by Price Bracket

A description of the distribution of sales across price brackets during the period. It is useful for quickly analyzing which price categories for properties are more commonly sold in a given geography.

Closed Days on Market (CDOM)

The average amount of time it takes to market and close on a property. This is useful for monitoring whether a market is accelerating or decelerating.

Distressed Sales

The percentage of sales over the last quarter that are either in foreclosure, short sale, or represent real estate owned by financial institutions.

Home Supply

The total number of properties of a certain type in a specific geography. Unless otherwise noted, this number includes all types of residential properties reported by the Multiple Listing Service (MLS).

Home Values ($)

This metric is used to indicate whether a market is favoring buyers or sellers. Generally zero to six (0–6) months of inventory indicate increasing sales prices, six to twelve (6–12) months indicate a stable market, and if the market exceeds twelve (12+) months, prices are falling.

List/Sell Ratio (L/S)

A comparison of the final sales price to the most recent list price prior to the property going under contract. The ratio can be used to compare buyers’ and sellers’ opinions of value.

Median Sales Price

A means of tracking property where one half of closed sales prices are higher and one half lower. This statistic is less at risk of being influenced by properties on either extreme of the pricing spectrum.

Months of Inventory (MOI)

The relationship of sales pace to the number of properties currently on the market if no additional homes were added to the supply. Months of Inventory is calculated by determining the number of homes sold per month and dividing by the total number of properties for sale on the last day of the month. It is susceptible to changes in supply and/or pace.

Sales Pace/Days on Market

This metric tracks the average days on market for the county by the average number of properties selling per month. When the two metrics are considered together, the trend lines can indicate changes in the market. Trend lines opposite one another indicate a recovering/accelerating market, and lines moving closer indicate a slowing market.

Sold Homes

The number of closed transactions in each price bracket. This is the ultimate snapshot of how communities are doing in the current real estate market.

Supply Pie Graph

The number of individual properties on the market on a specific date in a given geography across each price range.

Ready to Dive into Real Estate?

How do you feel about the real estate market metrics listed above? Does the market make a little more sense to you now? If you’re feeling confident, or if you just want to see the metrics in action, contact your Beverly-Hanks agent to request a FREE Quarterly Market Report.

All real estate is local. In order to make confident real estate decisions, it’s important to have timely and neighborhood-specific information. Contact us today to speak with a Beverly-Hanks real estate agent about buying or selling homes and land in Western North Carolina. View all Beverly-Hanks real estate listings.

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