City of Lafayette – Real Estate Market Indicators
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Lafayette New Listings (Inventory)
It all starts with inventory. Like any good or service, pricing is heavily influenced by available supply. In turn, available supply is determined by the amount of New Listings entering the market (pictured below) and also of course the amount of inventory that was already available, and the consumption rate of that inventory (the rate at which it is selling). The chart below shows how many detached homes, and also Condo/Townhomes were added in the community of Lafayette on a monthly basis. Just hover over a bar to get that months exact value.
Lafayette Time to Sell
The amount of time that it takes to sell a home is often referred to as Days on Market. It is influenced by a number of factors; number of homes available (inventory), consumer demand, etc. In a fast moving market, Days on Market will be low. In that sort of environment, competition for inventory can often be fierce, leading in some areas/times to bidding wars. You can see the Time to Sell a home and condo in Lafayette visualized in the graph below.
Lafayette Pending Sales
When an offer is accepted on a home for sale, we say that it is ‘pending.’ There are a number of things that have to happen before that pending listing actually becomes a sale, so occasionally a pending listing will go back on the market (fall out of pending). Despite that uncertainty, the volume of pending listings is a critical indicator of market activity. You can see the monthly pending activity in the community of Lafayette charted below for the past year.
Lafayette Recent Sales
While not all pending listings become sales, the majority of them do. Once the accepted offer is written into contract, and escrow closes on the transaction (basically meaning money changes hands), the property is considered sold. The deed is updated to reflect the new ownership, and the property goes into Sold status on the MLS. While we often keep our finger on the pulse of pending transactions to gauge market activity, in large part because it can sometimes take a long time to go from pending to sold, the reality is that the number of sales in any given month is perhaps the most important indicator of all. You can see the number of condo/townhomes and detached homes that closed escrow in each month in the city of Lafayette below.
Lafayette Average Sales Price
All of the above factors have a hand in helping to determine the asking price for homes for sale, and of course the asking price plays a large role in the final sales price agreed to by both buyer and seller. You can see the average sales price for both detached homes, and for condo/townhomes, charted by month for the city of Lafayette below.
Lafayette Median Sales Price
Average sales price is something easy for us to wrap our heads around. We all know what average means. What we sometimes don’t consider is just how dramatically an average can be affected by a few pieces of data, especially in a small sample. If there are millions of units being sold, one or two very expensive (or inexpensive) ones are not going to make much of a difference. But when there are only a few dozen units, and someone accidentally keys in a few extra zeros, suddenly the average is way out of scale. That is the primary reason why median is the best metric to use when we want to understand how much we might expect to pay for something. Median price helps to insulate us from wild swings that might be caused by that McMansion that just sold for 10 million dollars. Unlike average, median does not total all values and divide by the number of values, it simply asks how many total data points there are, and uses the middle one to represent that set of values. In a group of 9 homes for sale, the median price is the price of the 5th unit when they are sorted from least to most expensive. It doesn’t matter at all how high or how low the end points are. You can see the median price of homes and condo/townhomes for Lafayette displayed in the chart below.
Lafayette List to Sale (Percent Listing)
Finally, we can take a look at what percentage of the sticker price for homes that is being paid. This metric shows us how motivated the buyers are. In cool markets, especially with lots of inventory, you can expect that the List to Sale ratio will be below 100%. In hot markets, List to Sale sometimes exceeds 100%, sometimes significantly. This is typically what we think of as a bidding war environment. You can see the List to Sale ratio for homes and condo/townhomes for the city of Lafayette pictured below.
NOTE: The data in these charts is provided by the CCAR MLS. This data is real time, up to the minute information. As such, the ‘current month’ reported can, especially early in the month, represent large swings in data due to inadequate sample sizes. All data deemed accurate but not guaranteed. Always consult with a professional before making investment decisions.
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