Reading a local market is simpler than it looks. Compare what similar homes recently sold for, what is listed right now, and how long homes sit, and you can see whether you are in a buyer's market or a seller's market in your own price range.
Start with comparable sales.
A comparable sale, or comp, is a recently sold home similar to yours in size, condition, location, and how recently it closed. Three to five good comps tell you more than a hundred listings spread across the whole metro.
Choose comps within your neighborhood and your price range first, then extend outward by location or size only when you have to. Adjust mentally for obvious differences: an updated kitchen adds value, a busy street takes some away.
Active listings vs. solds.
Active listings show the competition today: the asking prices of homes buyers can walk into this week. Solds show what buyers actually paid, after negotiation, incentives, and condition adjustments. When a seller quotes a price from memory, it is usually an asking price; value comes from the closed sales.
When sold prices land close to asking, the market is balanced or strong. When homes sell well below asking, or sellers pay heavy concessions, buyers have room to negotiate.
Line the two up: compare asking prices against the sold prices of the same style of home in the same neighborhood. The gap is a useful measure of how much negotiating room exists today.
Days on market.
Days on market measures how long sold homes were listed before going under contract. A short median, a few weeks in most neighborhoods, usually means competition and little room for deep discounts. A long median means buyers can be picky, and offers can come in below asking.
Do not read too much into a single home: re-lists and unusual properties skew the number. Look at the median across several sales in your price range, and compare it to a few months ago to see whether the market is speeding up or slowing down.
Compare them in your price range.
Narrow every number to your price range. A market that is hot at $400,000 can be slow at $900,000, because different buyers compete at different price points.
Use price per square foot only among similar homes in the same neighborhood; it distorts when lots, updates, or floor plans differ. And weigh condition: a renovated home at the top of the range is the comp for a prepared home, while an as-is sale is the comp for one that needs work.
A market read is a snapshot, not a forecast. Local data by neighborhood and price range beats national averages every time.
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To your success, RED
This note is general information, not legal, tax, or financial advice. Every situation is different; talk with the right professional about yours.