Lower Merion Real Estate Market Oct-2017
Lower Merion Real Estate Market October 2017
There is a lot said these days about a lack of inventory in the residential real estate market. But, as in many things real estate related, one has to look at the specific local market and price range. The charts below plot data from the spreadsheet above it. The first one plots months of inventory on the Y axis against price range on the X axis for Lower Merion School District for the referenced 1 year period. The second plots days on the market versus price range and the third plots the sold price to original list price ratio against price range.
A month of inventory is the number of houses sold in a month. The value for a given price range is calculated by dividing the value in the 'Sold in Period' column--the period is12 months--by 12. This value is displayed in the 'Sales per Month' column. To get the current months of inventory for a given price range, the 'Currently Active' column is divided by the value in 'Sales per Month.' The chart clearly shows that the months of inventory rises significantly for the higher price ranges.
The Median Property Marketing Period graph shows a clear trend to a longer marketing period as the price range rises. The third chart indicates that the ratio of the sold price to the original price decreases with increasing price.
The above is all well and good, but what is the practical significance of the figures and charts? In residential real estate, the terms buyer's market and seller's market are characterized by the amount or months of inventory on hand. Less than 6 months supply is considered a seller's market and more than 6 months is considered a buyer's market. Per these definitions, the range from $200k - $1100k is a seller's market, meaning scarce supply, and the range from $1100k - $2000k is clearly a buyer's market, meaning abundant supply. One would expect a longer property marketing period in a buyer's market as buyers can take their time in making a selection and a lower one in a seller's market, wherein buyers must act quickly or lose out. The downward trend in sold price / original price ratio as one goes from a seller's market in the lower price ranges to a buyer's market in the upper ranges is also what one would expect.
So, it's fair to say that at this time in Lower Merion, inventory is low up to $1100k but is not low above $1100k. If you are a buyer in the $200k - $1100k range, you will generally have less ability to bargain for a lower price. Above $1100k, your bargaining power is stronger. Follow the link for more market statistics.