Suppose you'd decided to sell your lovely Foothills home and called your favorite Realtor® to come by and list it for you.
And after showing them around, and reviewing the comps and talking about the market and this and that, you decided to list the house for $1,250,000. Wanting your home to be competitively priced, you priced it based on recent sales and the price of other similar homes that are for sale, and then left yourself a little wiggle room. Everyone does.
And now, just as you're beginning to feel some relief that you've done the right thing and the big decisions are behind you, your friendly Realtor® tells you that your odds of selling your house are 1 in 36.
WHAT! you say, 1 in 36, what the hell are you talking about 1 in 36.
Well in your price range Mr. Jones, $1.0 - $1.5million,
there are 72 homes for sale. And in the past 3 months 6 have sold.
Doing the math, for sale 72 ÷ 6 sold = 12 x 3 months = 36
or, more simply, each month an average of 2 homes out of 72 are selling. That puts your odds at 1 in 36.
In real estate we call that 36 months of inventory, (MOI, months of inventory is the measure of how long it would take to sell all the current inventory, assuming no new listings were added) and that works, but like most industry lingo, it's kind of impersonal and anonymous, and it doesn't really hit home. ha-ha.
But posing it as, you've got a 1 in 36 shot of being the lucky seller, that puts a more personal spin on it.
If sales increase then Mr. Jones's odds will get better, if sales slow down, they'll get worse. And whether you call it months of inventory (MOI) or odds of selling (OOS), there's no getting around it, that's the market.
Looking at existing inventory of Foothills homes for sale vs. the number of homes sold during the last three months, here's the months of inventory, and the odds of selling a home in different price ranges.
$0 -$500,000- 182 for sale/56 sold = 9.75 months of inventory, or,
the odds of selling, 1 in 9.75
$500,000 - $999,999- 266 for sale/43 sold = 18 months inventory, or,
the odds of selling, 1 in 18
$1.0 - $1.5m- 72 for sale/6 sold = 36 months inventory, or,
the odds of selling, 1 in 36
$1.5 - $2.0m- 39 for sale/3 sold = 39 months inventory, or,
the odds of selling, 1 in 39
$2.0 & UP- 33 for sale/1 sold = 99 months inventory, or,
the odds of selling, 1 in 99
I like odds of selling, because it really hits home and makes the point.
But take your pick, MOI or OOS, either way, people need to understand the market we're in.
see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes
