Every real estate market is hyper-local. The national headlines about 'the housing market' rarely reflect what's happening in your specific city, neighborhood, or price range. Here's how to read your local market with the data available to you.
Months of Inventory
Months of inventory = Active Listings / Homes Sold Per Month. This single metric defines market dynamics:
| Months of Inventory | Market Type | What It Means for Buyers |
|---|---|---|
| Under 3 months | Hot seller's market | Multiple offers, above-list prices, contingencies waived |
| 3–4 months | Seller's market | Competition, some negotiating room |
| 4–6 months | Balanced market | Normal negotiation, fair pricing |
| 6+ months | Buyer's market | Negotiating power, concessions, price reductions |
Days on Market (DOM)
How long homes are sitting before going under contract. Falling DOM means the market is heating; rising DOM means it's cooling. A property with unusually high DOM may have a pricing problem, condition issue, or both — worth investigating.
List-to-Sale Price Ratio
If homes are selling at 103% of list price, sellers have the leverage. If they're selling at 96%, buyers do. Track this metric in your target neighborhood to set your offer strategy.
Price Per Square Foot Trends
Normalize prices by size to identify neighborhoods appreciating faster than others. This metric helps you spot value — a neighborhood with rising price-per-square-foot but still below nearby comparable areas may be the next emerging market.
Redfin, Zillow, and Realtor.com publish local market reports. Your agent can pull MLS data with more granular filters. For rental markets, Rentometer, ApartmentList, and Zillow Rent Estimator are strong resources.