• Home
  • Blog
  • Articles
  • How Does Inventory Accumulation Knowledge Help Buyers Find the Best Homes for Sale?

How Does Inventory Accumulation Knowledge Help Buyers Find the Best Homes for Sale?

Inventory Accumulation - Homes for Sale

 

At this time of year, real estate agents sometimes focus on the phenomenon in real estate called inventory accumulation.  This is commonly described as the number of houses sold compared to the number of homes available for sale and is generally expressed by the number of months it would take to sell all homes in the inventory. It is also called absorption rate.

Good real estate agents know that it only takes one house to satisfy a buyer—as long as it is the right house! When inventory accumulates, it could either be that buyers are not buying or that the houses on the market are “left overs”, or houses that buyers do not want.  Sometimes it is the season, sometimes the pricing, other times it is the condition and less frequently, it is the decorating.  A good real estate agent will be able to counsel a buyer to see past the decorating if the house is otherwise a good one.

Here is an explanation of inventory accumulation numbers.

·         1 – 3 Months of Inventory Accumulation

This is a Seller’s Market. Not enough homes are available to meet the demands of the buyers. Bidding wars with multiple offer situations can occur. During this type of market sellers generally will not accept home sale contingencies or delayed closing dates.

·         4 – 5 Months of Inventory Accumulation

This is considered a Balanced Market. There are sufficient numbers of buyers to purchase the supply of inventory that flows into the market and there are enough available homes from which to choose. In a balanced market, bidding wars are rare and price negotiations are likely.

·         6+ Months of Inventory Accumulation

This is a Buyer’s Market. Homes that are priced well and in high demand areas will most likely move quickly and homes that are overpriced or in low demand areas will take longer to sell. In this market condition, sellers are more likely to accept home sale contingencies.

Right now, in Delaware County, the number is 6.1, slightly tipped in favor of the buyer.  In Montgomery County, it is 5.3 and in Chester County it is 4.8. Those counties are enjoying a more balanced market right now.

While many factors contribute to the status of the real estate market, a real estate agent who is knowledgeable about inventory accumulation, will know which home is best suited to meet a buyer’s needs.  A surplus of houses generally allows buyers more flexibility with pricing in a Buyer’s Market, but availability may be limited in certain high demand areas.  In contrast, if the price of a house is too high or in a low demand area, selling can take longer.  Having fewer homes in a Seller’s Market can raise a different set of circumstances for buyers.  A number of things can happen when houses are not readily available:  multiple bids can be placed on a home, closing dates can be delayed, and the seller may not grant certain provisions.  If the market is balanced, there are enough buyers to purchase homes and a well-rounded number of houses from which to choose.  There is less competition and pricing negotiations are likely.  A buyer’s real estate agent should know the current market status of the area in which a buyer is seeking to purchase a home.   This can greatly affect what leverage a buyer may have when making a deal or what a buyer may have to forego in order to own the right home.  Our agents can help you navigate any of these market types to help you find your dream home.

For more information about the current real estate market and homes for sale in your area, contact Sage Realty LLC at 610-687-4000.   Our Philadelphia Market Statistics Page also offers resources to find the latest reports on the market.  Learn more at: https://www.findahomeinpa.com/buyer-resources/philadelphia-market-statistics/

Tags: , ,

Featured Testimonial

I moved to PA from Washington State and learned that realty is local. There were things that I thought I knew about buying a house previously but boy was I wrong. Linda was very patient with me but also did not hold back when she saw potential problems, and always made sure I had all the information I needed before making a decision and didn’t belittle concerns to just get a sale. Above all else, and this was the most important thing to me, Linda has a high ethical standard, is very transparent in her approach and is someone I trusted making one of the biggest decisions of my life. – A. Lindsay (Courtesy of Google)

 

Hear From Our Clients

  • "We were so pleased that a co-worker recommended someone in the area that she trusted. Boy, did we strike gold on all counts. You are amazing!"
  • "Instead of trying to take advantage of conflicts of interest, she puts the client's interests first."
  • "Linda is a hardworking, proactive and knowledgeable realtor. Throughout the process of finding and buying our new home, she was always responsive and kept us up to date on every detail."
  • "Linda and the group at Sage are the right fit. You won’t find more knowledgeable, prepared and professional agents."
  • "Linda and Tracey really know the Main Line area."
  • "Throughout the entire process we never doubted that she always had our best interests in mind. We wouldn’t consider anyone else when buying a home on the Main Line."
  • "From start to finish, Linda brought to bear a most helpful combination of experience, knowledge, attention and integrity on a somewhat complicated transaction. There was never any doubt that she represented our interests."
  • "Her knowledge of the area helped us quickly narrow our search and ultimately scored us an amazing home in an incredible neighborhood."
  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

Hear from our Clients

  • "We were so pleased that a co-worker recommended someone in the area that she trusted. Boy, did we strike gold on all counts. You are amazing!"
  • "Instead of trying to take advantage of conflicts of interest, she puts the client's interests first."
  • "Linda is a hardworking, proactive and knowledgeable realtor. Throughout the process of finding and buying our new home, she was always responsive and kept us up to date on every detail."
  • "Linda and the group at Sage are the right fit. You won’t find more knowledgeable, prepared and professional agents."
  • "Linda and Tracey really know the Main Line area."
  • "Throughout the entire process we never doubted that she always had our best interests in mind. We wouldn’t consider anyone else when buying a home on the Main Line."
  • "From start to finish, Linda brought to bear a most helpful combination of experience, knowledge, attention and integrity on a somewhat complicated transaction. There was never any doubt that she represented our interests."
  • "Her knowledge of the area helped us quickly narrow our search and ultimately scored us an amazing home in an incredible neighborhood."
  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

Sage Buyer Tips

Use Sage Buyer Tips to research the Main Line and stay up to date on real estate news. This online destination is chock full of resources for buyers and sellers: you can see our Main Line communities or explore Sage favorite places. Browse properties here and search other Main Line real estate. With Sage’s advice and experience, first-time buyers and those looking to upgrade can find homes best suited to their needs.