Want to know what’s really going on in your market? Don’t look at the larger marketplace as a whole—look at your micro market.
Do you know what your local micro market is doing?
I get asked quite frequently how the market is, and if you’ve been following the news lately, you know that the DFW area is still in a seller’s market. However, asking “How’s the market?” is a bit of a loaded question because there are a lot of different data points we can examine to really figure out what the market is like. We could look at the average days on market, the average sold price versus list price, the number of homes coming on the market, etc.
Another reliable statistic we could point to, and one that I’ll use to illustrate the difference between micro markets, is months of inventory. In a balanced market, there’s about six months’ worth of available inventory. In a seller’s market, there’s less than six months’ worth. In the DFW area, we have three months of inventory, which puts us in a seller’s market.
“If you really want to know what the market is doing, you have to look at your micro market.”
But what happens when we examine the months of inventory in the micro markets of the DFW area? How different is Dallas County from Collin County? Or Collin County from Tarrant County?
In Dallas County, we have three months of inventory. In Collin County, we have four months of inventory. In Tarrant County, we have two months of inventory. But if you remove new construction homes from the equation and just focus on pre-owned homes, the inventory for each of these counties will vary once more.
If you specify even more and look at inventory for only pre-owned homes in the $400,000 price range in Dallas County, that will be a very different number than the one you’ll find for pre-owned homes in the $200,000 range in Tarrant County.
This is why, if you really want to know what the market is doing, you have to look at your micro market.
If you’re interested in what’s going on in your micro market, I’d be glad to send you a monthly or quarterly report to keep you updated. If you don’t own a home yet but you’re thinking of moving to a specific neighborhood, I can also make a specialized quarterly report for that neighborhood.
If you have any other questions about this or any other real estate topic, feel free to reach out to me. I’d be happy to help you.