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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Roads End who wrote (6603)11/6/2002 10:56:15 AM
From: TradeliteRead Replies (1) of 306849
 
<<the days outstanding of unsold homes, highest since 1996 and 4 months. Someone here was speculating that over 90 days is negative for housing as I recall.>>

Average marketing time for homes is not synonymous with "months' supply of homes" numbers. They aren't the same thing at all.

Average marketing time for homes in *average markets* has always been assumed to be about 90 days. Real estate isn't really quite as liquid as it has appeared to be in the past several years, and it does take some time to expose property to enough buyers to generate an offer or two when the market is in equilibrium.

Unusual properties, for which there really is never a big market, will normally take much longer to sell--90 days would not be a realistic projection for marketing time in those cases.

A completely different measure of market health is months' supply of inventory. This basically measures the pace of sales--in other words, someone is saying that if houses keep selling at their present pace, the existing inventory will be exhausted in four months.

This really isn't a bad inventory number, by the way. During the last housing recession, months' supply numbers were reaching 12 and 14 months in some areas--meaning sales were pretty slow and it was going to take a long time to burn off inventory. Four months would be considered pretty moderate.
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