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WHAT IS A BUYERS MARKET?
In this video Jason Fox gives his answer to the question… “What is a Buyers Market?”
A “Buyers Market” is when there is more than 3 months of housing inventory.
That is based off of the Law of Supply and Demand.
Generally, low supply and high demand increase price and vice versa.
For supply we use a term called Inventory, or how many houses are for sale.
Demand is impossible to pinpoint but we use some key indicators such as population size and growth, job growth rate, access to capitol, interest rates and how quickly homes sell.
When we talk about inventory it is in terms of how many months of inventory we have to sell.
That is the number of active listings divided by sales and pending sales.
A neutral market once was considered 5-6 months of inventory. Recently the economists have shifted it to 3-4 months of inventory.
WHAT IS A BUYERS MARKET? Real Estate FAQ [VIDEO TRANSCRIPT]
Hey everybody it’s Jason Fox with The
Madrona Group and today I’m answering
some frequently asked questions about
real estate. What is a buyers market?
A buyers market is when you have more
than three months of inventory. Inventory
is measured by that number of listings
divided by the sales and pending sales.
Currently, in January 2020 we have
about one month’s supply of inventory so
that is a seller’s market. We need to be
higher than three months for it to be a
buyers market that’s based off of supply
and demand. Obviously if we have less supply
then we have more demand.