The Pond

“The Pond” chart illustrates the concept of a market… where properties come on the market and go off the market at specific rates.

Screenshot 2014-08-13 22.57.56

In the past 24 months, an average of .4 “new properties/month” entered the market (left).

They are being “sold per month” or absorbed, at .5 properties (right).

With a total inventory of 1 unit for sale (in escrow), currently for sale, this gives us a monthly supply of 2 month.  In other words, if no new properties came on the market, everything would sell in 2 months.  6 months of supply is considered a “Balanced Market”.  Anything less than 6 months, is considered a “Seller’s Market”.

Therefore, each month a seller has a 50% chance of selling.

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