Understanding Key Real Estate Metrics: A Guide for Homebuyers

Hey there, homebuyers! Randi Williams here with Flat Fee Real Estate (FFRE) in North Georgia. I create weekly real estate videos about market trends in different areas of North Georgia, and today I realized something important—I haven’t explained what the numbers in these market updates actually mean. So, let’s dive into some key real estate metrics that can help you better understand the current market conditions and trends.

As a former educator with 20 years of experience, breaking down complex topics and presenting them in a clear, digestible way is my specialty. Let’s get into it!

1. Months Supply of Inventory

The Months Supply of Inventory measures how long it would take to sell all the homes currently on the market, assuming no new listings. In simpler terms, it tells us whether we’re in a buyer's or a seller's market.

  • A lower number means we’re in a seller’s market because inventory is limited, and homes are selling fast.

  • A higher number indicates a buyer’s market, where there’s more inventory, giving buyers more negotiating power.

If you're a buyer, this is a key indicator to watch to know how much competition you'll face and how quickly you need to act.

2. Median Days on Market

The Median Days on Market (DOM) represents the middle value of the number of days homes spend on the market before going under contract. This means half of the homes sold faster, and half took longer.

For buyers, homes with higher days on market might signal opportunities for negotiation, as they could be overpriced or have other issues. On a broader scale:

  • More days on market indicates a slower market (buyer’s market).

  • Fewer days on market shows a faster-moving, competitive market (seller’s market).

Paying attention to this number can help you gauge how quickly you’ll need to make offers in a particular area.

3. Median Sold Price

The Median Sold Price is the middle price of all homes sold in a given period, making it a better reflection of the typical home price in an area than the average. Unlike average prices, which can be skewed by extremely high or low sales, the median gives a more accurate sense of the market’s "sweet spot."

This number can help you determine whether homes in a specific area are within your budget. It's a critical metric for understanding the price point of typical homes, rather than focusing on extremes.

4. List to Sold Price Percentage

This percentage compares a home’s final sale price to its original list price. The formula is simple: divide the sale price by the list price.

  • A percentage above 100% means the property sold for more than the list price, which can indicate strong demand or underpricing by the seller.

  • A percentage below 100% means the property sold for less than the list price, which could signal either lower demand or overpricing by the seller.

Knowing this ratio can help you determine what kind of offer to make. If most homes are selling above list price, you might need to make a competitive offer, especially in a hot market.

Why You Should Care About These Metrics

These metrics are powerful tools to help you make data-driven decisions in your homebuying journey. Rather than relying solely on instinct or emotion, understanding the numbers behind the market can guide you toward smarter, more informed decisions.

By keeping an eye on these trends, you can better understand whether it's a good time to buy, what to offer, and how long to wait.

If you'd like to know more about these key real estate metrics or need assistance navigating the homebuying process in North Georgia, feel free to reach out to me! At Flat Fee Real Estate, we’re here to help you every step of the way.

Contact Randi Williams today to get expert guidance on buying a home in North Georgia!

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