Months of Inventory (also known as absorption rate) is an expression used to indicate the number of months needed to sell current listings, based on the number of properties sold in a certain period of time (usually one year).
For example, in Friendswood, at the time we published this blog, there had been 801 single family homes sold in the previous 12 months. That's an average of 66.75 homes sold per month. There are currently 144 homes for sale. So, at a rate of 66.7 homes per month, it would take an average of 2.2 months to sell all the homes listed for sale, without considering new listings added every day to the market.
However, the months of inventory vary according to price ranges. In Friendswood, there is less than a month of inventory for homes listed under $200,000, almost two months for homes listed between $200,000 and $500,000, about 6 months for homes listed between $500,000 and $1,000,000, and 44 MONTHS for homes listed above $1,000,000!
The information regarding months of inventory is very important for sellers and buyers alike. Knowing how long properties are expected to be on the market will affect the marketing efforts as well as purchasing strategies. For current information on specific neighborhoods,register on my website at www.VivianFranco.com or contact me at firstname.lastname@example.org.
Disclaimer: The information is based on MLS data provided by HAR, which has not been verified. Due to the rapidly changing nature of real estate markets and our reliance on information provided by outside sources, we make no warranty or guarantee concerning the accuracy or reliability of the data, presented only for general information purposes.