Our average months of inventory for all list price ranges for the month of April is 6.1 months. The above chart provides an average by each list price range through May.
According to the National Association of Realtors(NAR) and our local Houston Association of Realtors(HAR) months of inventory is calculated by dividing the number of active listings by the average number of homes sold during the previous 12 months.
A number below 6 is defined as a seller’s market; meaning there are more buyers in the market than homes for sale. This results in higher list price to sale price ratios and creates an atmosphere for multiple offers on listings.
A number above 6 is defined as a buyer’s market; meaning more homes for sale than the number of buyers looking for a home. The result is a lower list price to sale price ratio and creates an atmosphere for continuous price reductions, incentive bonus to sales agent, etc.
As you noticed from the above explanations, the magic number is 6. The number 6 is defined by the experts as being a balanced market. This describes The Woodlands real estate market! If you view the three-year Months-Of-Inventory chart, you will notice The Woodlands closely fits the balanced market definition.
Data Source: HAR
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