Deeper dive into The Odds of Selling
The market continues to shift into a lower gear as the holidays approach and it's important that we take a deeper dive into The Odds of Selling. When I look at The Odds of Selling, I'm taking into account all of the available homes for sale vs. those that go under contract and or close and project it forward for a 30 day period of time. Looking at the numbers on a weekly basis going back to the beginning of 2020 don't give us the correct perspective on where we should be at this time of year. The Odds of Selling this week dropped to 45.2% for the next 30 day period.
Taking a more historical approach to The Odds of Selling and looking back at our traditional real estate cycle from 2013-2019 where we also hovered around 2.0 months of inventory we are not that far off from where we should be at this time of year. This graph shows The Odds of Selling going back to 2013-2019 for the month of October was 49.4% on average. While this year has been fraught with affordability and interest rate challenges this is a return to a more 'normal' market experience post The Great Recession.
We are still waiting for the purge of active inventory in our market, usually by the end of September we see a jump in expired and withdrawn transactions. This purge hasn't happened yet keeping our inventory levels higher than average heading into Q4. This purge of inventory is what drives our spring market, if inventory remains high we may continue to see significant price reductions into the last part of 2022 and the beginning of 2023. We will know more about inventory in next week's market update. Stay tuned.