A Buyer’s Market? On Tuesday, there were 16 homes listed for sale in Cherry Hills Subdivision in Southwest Champaign. 14 of these were 1 1/2 or 2 Story homes (only two Ranches). Relating this to the market activity over the past 6 and 12 months tells us that we have a 7 1/2 month supply of homes in Cherry Hills.
A Buyer’s Market exists when there is a greater than 6 month supply of inventory (homes for sale). For Cherry Hills Subdivision, 7.4 months of supply reflects the previous 6 month average (5/1 thru 12/1). The 12 month average rests at 9.1 months. The good news for Buyers is that it’s a great time to move in or up. The good news for Sellers is that it is not an incredibly strong buyers market.
How do we calculate the supply of homes? First we determine the number of homes currently for sale in a given subdivision or market area, Cherry Hills for this example. Next, we need to determine the number of homes selling in the average month. For the 6 month average we total the home sales for the 6 month period and divide by 6. Finally, you divide the number of homes for sale by the number of homes selling per month.
For Cherry Hills’ 6 month averages the numbers are: 16 homes actively listed / (13 Closed Sales in prior 6 months / 6) = 7.4 Months of Supply. The same formula applied to the 12 month average: 16/(21/12) = 9.1 Months of Supply.
Great, we know the supply of homes! Now What?
Exactly… Now we need to relate this information to the specific home to be purchased or sold. If you need to sell your home in Cherry Hills right now you are facing the prospects of roughly 2 home sales per month in your subdivision. This is one of many significant statistics to keep in mind in pricing and marketing your property. Keep in mind that you will need to compare your home to more than the overall averages in Cherry Hills to determine your home’s market value. One of the main components of this is the CMA, Comparative Market Analysis. This determines the market value of your home by directly comparing it to similar sales in your neighborhood adjusting for differences in value (finished basements, 3 car garages, etc.). It is also similar to what an appraiser provides.
Establishing the correct Market Value for your home is extremely important for a successful sale. Email or call today and we can start a conversation on your home’s value. Home’s will be selling in Cherry Hills this winter, make sure yours is one of them!
www.ChampaignValues.com – Find Your Home’s Estimated Value Instantly!