Housing inventory is measured by how many months it would take to sell the current supply of homes. The currant rate of home sales is taken into account. A common formula used to calculate the housing inventory is taking the number of active listings and dividing it by the average number of homes sold over the past 12 months. The total number is measured in months. See the example below.
A seller is at an advantage because the availability of homes is low in comparison to the number of buyers looking to purchase a home. The seller’s home is in demand and higher prices can reflect the low inventory.
A buyer has an advantage because there are more homes available to choose from than there are buyers looking to purchase. Because of the inventory abundance, sellers may drop the price of the home or accept a low offer.
A market is balanced when the supply is equal to the demand. It can be a good market for both buyers and sellers when the demand is equal.
Median Sales Price:
The median sales price is the exact middle point of all homes sold. Half of the homes sold were above this price and half of the homes sold were bellow this price. The medians ales price differs from the average sales price in that the average sales price is the sum of all homes sold divided by the number of home sold.