What are the Leading Indicators When it Comes to Assessing the Real Estate Market?

Los Angeles Realtor, Scott Himelstein walks you through the leading indicators to look at to assess how the Los Angeles Housing Market is doing.

Hi there, it’s Scott Himelstein with the Scott Himelstein Group. As a realtor I often get asked the questions on a daily basis, what is the market like? Or how is the market? Today, I’m going to detail how the these leading indicators can help you assess the market whether you are looking to buy or sell a home. 

The first indicator is inventory. We look at inventory in terms of the amount of months of supply; which is how long will it take for all of the current properties that are active to sell if there are no new homes coming on the market. In a normal market, this is about 6 months worth of homes. Earlier this year, in most of LA County, there was under a month supply of inventory on the market that helped fueled multiple offers and homes selling above their asking price. 

The second indicator is list-to-sales price. List-to-sale price is the percentage of the list price versus the sales price. If the property is listed at $1 million and sold at $900,000, the list-to-sales price is 90%. That’s an indicator, we’re going to take a look at to see where the health of the market is. We like to think in the high nineties, that’s a pretty healthy market. If we’re getting over hundred percent or even at hundred percent, we know bidding wars are happening in that market.  The last indicator is days-on-the-market. It means how long does it take for a home to sell in the market. In the San Fernando Valley, the days-on-the-market is 2-3 weeks. Although this time has increased, this is still a record low time to be able to sell your property.

 “Taking notice of these indicators will give you the proper strategy in the real estate market.”

These three indicators are very important as they affect the pricing and market strategy. We have a very hypermarket and we want to account for that when we’re putting a property for sale and are making decisions so that you can maximize the amount of money in your pocket. Contact me to discuss houses in your market and specific area. Thanks!