Ridiculous amount of homes for sale?

[mortgageboss]

I agree with the appraisal issue. I have had 4 properties in the last three months appraise for less than the purchase price. Still, people seem to be buying at these prices.

[dan_boise]

The just at 200K price range seems to be very hot where the 300K and up is a little slower and homes are sitting on the market longer. This is just my personal experience from friends and co-workers purchasing homes as well as the ones I see being built or sitting with for sale signs out front. The Parade Of Homes had 40+ homes this year, that seemed like many more than recent years.

[mtnlady]

What does a 6 month supply mean? If there are x number of houses for sale how does that relate to # months?

[BrianX]

Originally Posted by mtnlady

What does a 6 month supply mean? If there are x number of houses for sale how does that relate to # months?

Here's a definition I found, not sure I can link to it:

Months of supply is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5 month supply of homes for sale.
Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 6 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers.

[Lacerta]

That is right.

So if my criteria are:
Active listings
Ada County
Single Family and townhouses
Under $200k
And there are 600 listings

And then using that same criteria, but changing active listings to sold in the month of April (or last 30 days, whichever you prefer), say there are 400 houses sold. That means that there is 600/400 = 1.5 month's supply. You can do this for any set of criteria. It basically means "given the current market sale rate, the average time to completely turn over all inventory".

So it is completely unrelated to the average sales time of any given property (which is much much lower than 6 months). It is the average time to sell all properties currently on the market. Not all properties will sell, of course, but it is a statistics thing.