How to Calculate Home Inventory

How Housing Inventory Works

Housing inventory is the active total Advertisement plus sales pending at the end of the month. When inventories are high, there is less risk of house prices rising because there is less room for bidding wars.

When a seller advertises a property, it immediately becomes part of the inventory of homes or homes available to potential real estate buyers. Homes move through the real estate cycle, affecting inventory levels daily. They increase inventory when sellers list them and decrease inventory when sales close.

Housing prices rise when inventories are low because the supply of housing is not high enough to meet demand. Unfortunately, this often causes bidding wars in the real estate marketmaking it harder for buyers to afford homes.

Buyer vs. sellers market

The housing market can be a of the buyer Where sellers market. A buyer’s market has a supply of homes that exceeds the demand for homes. This is because buyers have a choice of homes and sellers are often more flexible with their prices and the terms they will agree to in order to sell their homes faster.

In a seller’s market, the seller has the upper hand because there are fewer houses on the real estate market than there are buyers. Therefore, in a seller’s market, sellers often get higher prices for their homes and can be picky about who they sell their homes to based on the terms offered.

In a seller’s market, bidding wars often occur, causing home prices to rise, excluding some buyers from the market.

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