What's Going On?

What's going on? That's a question I get asked time and time again. For most people, when they get asked that, the person asking the question just wants to know how the other person is doing. When I get asked that, the person asking the question wants to know what's going on with the real estate market. Since I have been asked that a lot lately, I felt it is time I gave all of you an update on the real estate market within the last six months in Miami-Dade County.

What type of intentory of homes are on the market now? In the last six months, of all the new listings put on the market, one third were short sales (pre-foreclosures), eleven percent were foreclosures (REO's), and the rest (fifty-six percent) were regular sales.

Months of inventory is a term that is used in the real estate industry that determines what type of market we are in - stable market, buyer's market, seller's market. Months of inventory is basically the amount of homes available for sale in a given area divided by how many homes sell per month in that given area. So if there were 200 homes for sale in a given area and ten sell every month, you would have twenty months of inventory. In a stable market, there is roughly six months of inventory for sale. As the months of inventory increases, the market becomes a buyer's market because there is much more supply than demand. On the other hand, when inventory starts to decrease below six months, it starts to become a seller's market because demand becomes greater than supply. Just to give you an example, at the peak of the real estate market a few years ago, there were times when there were only three months of inventory, a very strong seller's market. During the worst times of the real estate market a couple of years ago, there were certain areas that had over sixty and seventy months of inventory, a strong buyer's market. Below are the months of inventory within different price ranges.

0 - $250,000 - 7 months of inventory
$250,001 - $500,000 - 11 months of inventory
$500,001 - $1,000,000 - 16 months of inventory
$1,000,001 - $2,500,000 - 28 months of inventory
$2,500,001 plus - 36 months of inventory

Stats are great, but what does the above information mean? That is something I will discuss in a future post. If you can't wait until then, please contact me and I'll let you know.


Amit Bhuta, ABR, CNS, e-PRO Realtor-Associate
Coldwell Banker Residential Real Estate
Serving Miami-Dade and Broward County
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