Market Statistics Dictionary
Understanding the Real Estate Market
As a programmer delving into real estate market data, it's essential to familiarize yourself with key terms and concepts in the industry. This knowledge will enhance your understanding of the data you'll be working with and its significance to real estate professionals, particularly agents.
Key Real Estate Terms and Fields
- MLS (Multiple Listing Service): A database used by real estate brokers to share information about properties for sale. Each listing in an MLS typically has a unique identifier.
- Listing: Refers to a property that is available for sale or rent. Key details in a listing include price, location, size (square footage), type (residential, commercial), and status (active, pending, sold).
- Active Listing: A property currently available for sale or rent.
- Pending Sale: A property that is under contract but the sale has not yet been finalized.
- Sold Listing: A property that has completed the sale process.
- DOM (Days on Market): The number of days a property remains listed on the market before being sold or taken off the market.
- Asking Price vs. Selling Price: The price at which a property is listed (asking) compared to the price it is sold for (selling).
- Property Type and Sub-Type: Classifications of property, such as Residential, Commercial, Land, etc., and further sub-categories within these types, such as single-family homes or condominiums.
Key Aggregated Statistics in Real Estate
Understanding aggregated real estate statistics is crucial, as they provide a broader view of the market:
- Average and Median Price: These statistics provide insights into the overall pricing trends in a specific area. While the average price can be skewed by extremely high or low values, the median offers a more middle-ground perspective.
- Total Volume of Sales: This refers to the total value of all real estate transactions within a specific period. It's an indicator of the market's overall health and activity level.
- Average DOM (Days on Market): Indicates how long properties typically stay on the market before being sold. Shorter DOM can indicate a seller's market, while longer DOM suggests a buyer's market.
- Price per Square Foot: This is used to compare the value of different properties regardless of size, providing a standard metric for valuation.
- Inventory Levels: Refers to the number of active listings at a given time. High inventory might indicate a surplus of properties (buyer's market), while low inventory suggests a shortage (seller's market).
- List to Sale Ratio: This statistic compares the listing price of properties to their final sale price. A higher ratio indicates that homes are selling close to or above their asking prices, often seen in competitive markets. Conversely, a lower ratio suggests buyers are purchasing homes for less than the listed price, common in less competitive markets.
- Absorption Rate: The rate at which available homes are sold in a specific market during a given time period. It's calculated by dividing the total number of available homes by the average number of sales per month.
Definition of Data points available in the API
| Name | Definition |
|---|---|
| List Price | The current asking price set by the seller |
| Original List Price | The initial asking price at which a property is listed for sale by a seller. |
| Year Built | The year a property was built |
| Average Days to Close | The average number of days it takes from when a property is listed on the market to when it is marked as closed in the MLS. |
| Median Days to Close | The median number of days it takes from when a property is listed on the market to when it is marked as closed in the MLS. |
| Average Days to Contract | The average number of days it takes from when a property is listed on the market to when it enters into a contract. |
| Median Days to Contract | The median number of days it takes from when a property is listed on the market to when it enters into a contract. |
| Months of Inventory | The number of months it would take to sell the current inventory of homes on the market, based on the current sales pace. |
| Absorption Rate | The rate at which available homes are sold in a market per month |
| Sales Volume | The total monetary value of all real estate transactions within a specific market during a given time period. |
| Sale to List Price Ratio | The ratio of the final sale price of a property to its original or current list price, expressed as a percentage. |
| List to Sale Price Ratio | |
| # of Listings with a Price Reduction | The total count of property listings that have undergone a reduction in their asking price. |
| % of Listings with a Price Reduction | The percentage of property listings that have undergone a reduction in their asking price. |
| # of Listings Sold Over Asking | The total count of property listings that were sold at a price higher than their original or current list price. |
| % of Listings sold Over Asking | The percentage of property listings that were sold at a price higher than their original or current list price. |
| Price Per Square Foot (Active) | The average price per square foot for active listings in a real estate market. |
| Price Per Bedroom (Active) | The average price per bedroom for active listings in a real estate market. |
| Price Per Square Foot (Sold) | The average price per square foot for properties that have been sold in a real estate market. |
| Listing Counts | The total count of active property listings in a real estate market. |
| Price Per Bedroom (Sold) | The average price per bedroom for properties that have been sold in a real estate market. |
Why These Statistics Matter
Real estate agents and professionals use these statistics to gauge market conditions, advise clients, set expectations, and formulate strategies. For instance, if the average DOM is low and prices are rising, agents might advise sellers to expect quick sales and possibly higher offers. Conversely, buyers might be advised to act quickly in such markets. Understanding these dynamics is key for programming applications that provide meaningful insights into the real estate market.
Conclusion
As a programmer in the realm of real estate data, grasping these terms and concepts will enable you to better understand the significance of the data and how it's used by real estate professionals. This understanding is vital in creating tools and applications that effectively serve their needs and the broader real estate market.