How to Calculate Months of Supply

We use the term "months of supply" in real estate to tell us how much inventory of homes for sale we have on the market.  The months of supply is the time it would take for all the current inventory to sell if it all sold at the current rate without new inventory coming on the market. But how to calculate months of supply you ask? Months of supply is the number of houses currently for sale divided by the average number of homes sold per month. Let's look at a few examples. In the past 12 months 139 single family homes sold in the Leavenworth area. If we divide 139 by 12 we get an average of 11.58 homes per month. (Some programs use just the last month's sales, but averaging the last 12 months better accounts for seasonal variation.) So to get the months of supply we divide the current supply which is 89 homes by 11.58. calculate inventory We currently have 7.69 months of supply. 6 months of supply is considered the benchmark for a balanced market. Less than 6 months of supply favors the sellers because there are less choices for the buyer. More than 6 months favors the buyers and leads to lower prices. sellers market We can further break down the months of supply by looking at any subset of the market that we are interested in - price ranges, neighborhood, number of bedrooms, homes with acreage etc. Let's look at the luxury home market in Leavenworth and Lake Wenatchee. I would consider this to be homes above $600,000. In the past 12 months, 12 homes sold for more than $600,000 or 1 per month. The math is pretty easy on this one. With 19 homes currently for sale, we have 19 months of supply which is a very strong buyers market in the luxury home segment. leavenworth supply of luxury homes How about more modest homes? The bread and butter home sales are in the $200-400,000 range in the Leavenworth market. In the past 12 months, 86 homes sold in this price range or 7.17 per month. There are currently 41 homes on the market in this price range. calculate months of supply If we divide 41 by 7.17 we get 5.7 months of supply which is a pretty balanced market. months of supply The more extreme a buyer's market (12 months or more of supply) the better a deal the buyer might be able to negotiate. The smaller the inventory (1-2 months of supply) the more likely a seller is to see multiple offers or quickly rising prices. To make the most of this calculation, it's best to narrow down the category to a search likely used by buyers. Compare lakefront homes to lakefront homes, large houses to large houses, condos to condos. ********************************************************************************************************** Required Disclaimer NOTE: This representation is based in whole or in part on data supplied by the North Central Washington Association of Realtors or its Multiple Listing Service. Neither the Association nor its MLS guarantees or are in any way responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the Market.  

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Allyson and Geordie Romer

Leavenworth real estate agents - Allyson and Geordie Romer

For over a decade, Allyson and Geordie have been serving clients in the Leavenworth-area real estate market. Together, they work tirelessly to stay on top of the regional market and present the most relevant opportunities to their clientele.

When not in the office, they can be found exploring the endless recreation opportunities of the area in all of its seasons.

 

Testimonials

 

Geordie provided excellent real estate representation! We appreciated his detailed knowledge of the market, his up front and honest approach, and his negotiation skills.
As reviewed on Zillow  – 

- Laura Anderson

 

 

As “west siders” looking for a getaway near Leavenworth, Geordie provided insight … his knowledge of design features important in a “snowy winter wonderland” was appreciated. Thanks Geordie!
As reviewed on Zillow  –
 

- Jean Stern

 

 

Geordie made this somewhat complicated transition easier for us…going above and beyond to help us work through issues that came up during the sale of our parents home. We appreciated his knowledge, attentiveness to details and his willing spirit.
Our family is grateful for Geordie!
As reviewed on Zillow  – 

- Terry Foster

 

 

Geordie was great in every way. We have been looking in the Leavenworth area for some time, and Geordie was absolutely the best for local knowledge, history and depth on neighborhoods, developments and the local market trends. He was very quick to respond (even when he was on his vacation) and worked very diligently to get all of our questions answered in a very timely fashion. We would recommend him highly to anyone looking to buy or sell a home. Very friendly, and helped us navigate all of the local options before we made an offer on the property that we purchased. Thank you, Geordie!

As reviewed on Zillow  – 

- Ryan Olsen

 

 

It was such a pleasure to work with Geordie and his wife, Allyson on our cabin purchase. They showed us a variety of locations, listened to what we wanted and helped us find the perfect match. Everything was smooth and not stressful, just relaxed and easy. We would definitely recommend Geordie and use him again if the need arises!

As reviewed on Zillow  – 

- Cammie Schlosser

 

Moving to Leavenworth?

Are you looking for a cabin or a condo in Leavenworth that your family can use as a home base when climbing, skiing or hiking around Leavenworth or Lake Wenatchee?

Maybe you rent a house here and have decided to stay, surprised how a summer of rafting somehow turned into seven years.

Maybe it’s time to escape the hustle of the big city (and its rain) and move to Leavenworth with its four seasons.

Maybe you bought a condo years ago, don’t seem to use as much, and it’s time to sell.

Whatever your motivation, we are here to help. If you are buying a home, the best place to start is with our Homebuyer’s Guide to Leavenworth.