Homes for sale in Boca Raton – Buyer’s Market or Seller’s Market?
When we talk about a buyer’s market or seller’s market in Boca Raton, we are basing that definition on the inventory of homes for sale in Boca Raton. But what does that mean? It just refers to how many months supply of homes for sale in Boca Raton are available at this moment
For example, if we say there’s a 5 month supply of homes for sale in Boca Raton at this moment, that means it would take 5 months to sell all of these homes at the current sales pace—provided no other homes in Boca Raton came on the market.
Here’s how we calculate the inventory of homes for sale in Boca Raton.
Naturally, more homes for sale in Boca Raton arrive on the market every day.
But, for statistical purposes, if the current rate at which Boca Raton homes are arriving on the market– versus the current rate at which they are selling — remains steady, then we have a basis for calculation.
Now that we’ve defined what the inventory of Boca Raton homes for sale refers to, let’s see how to calculate the number of months’ supply available.
First, we take the current number of homes for sale in Boca Raton. (Let’s call that number 2800 just for the sake of easy arithmetic).
Now, we look at how many Boca Raton homes sold during the previous 365 days. (We’ll make that number 4800). We divide 4800 by 12 months and get an average of 400 homes sold in Boca per month.
With that number in mind, we divide the 2800 currently available Boca Raton homes for sale by 400 (the monthly average of Boca homes sold). 2800 / 400 = 7.
If those were our numbers, we would have a 7 month supply of homes for sale in Boca Raton.
What do these numbers mean for you?
When we have a 6 month supply of homes for sale in Boca Raton, the market is said to be in a state of equilibrium. That means there’s basically enough inventory so that neither buyer nor seller has any real advantage. As a result, prices tend to remain relatively stable.
When that happens — if Boca home sellers price intelligently for the market — and if buyers have sufficient cash or can obtain a mortgage — then with just a bit of negotiation, everybody walks away happy with the deal.
If we have more than a six month supply p Boca Raton homes for sale, then buyers of these homes have some advantage because the supply of homes in Boca would exceed demand. That’s when Boca home buyers can expect to negotiate a lower price more easily.
If we have less than a six month supply, then Boca home sellers tighten up on their demands and buyers find far fewer price concessions.
Your price category also may also determine whether you’re in a buyer or seller’s market. Sometimes there are more or fewer homes within different price ranges, depending upon where you to live.
Current numbers of homes for sale in Boca Raton say we’re almost at equilibrium.
Let’s say you’ve just gotten approval for an FHA mortgage and you’re ready to purchase you first Boca Raton home in the $200-$249,000 price category. Right now, there are 224 homes listed in this category.
Last year, 469 homes in Boca Raton sold within this price range. That is an average of 38 (approx) per month.
Using those current numbers, we see that 224 / 38 = 5.89. That is very close to market equilibrium. That means buyers in this price category are not likely to find themselves in bidding wars because we are very close to a six month supply of homes for sale in Boca Raton.
Looking at homes priced in the $400,000 – $449,000 category, we see that 203 of these homes sold last year. Currently there are 91 Boca Raton homes for sale in this price category. If divide that number by 12, we know that approximately 17 homes per month in Boca Raton sold in that price range last year.
In order to check the current number of months’ supply of homes in Boca in this price range, we perform this calculation: 91 / 17 = 5.35.
Once again, while we are not quite at equilibrium, we are moving very close to it, with a 5.3 month supply.
What this means if you’re looking for Boca Raton homes.
While no one can predict where the real estate market will be in a year (and sometimes even in a month), it appears that the supply of homes for sale in Boca Raton is rapidly moving toward equilibrium in the marketplace.
If you’re thinking of selling a home in Boca Raton or buying a home in Boca Raton, here’s what to expect: for sellers, there will be additional competition in the marketplace in your price category. This gives buyers a few choices in their price category, but not an excessive number. But that choice may give them some room to negotiate with you on price.
For buyers, the market will not be as tight. You should expect to see some additional homes for sale in your price range. Don’t be afraid to ask for some concession on asking price, but don’t expect to see double digit price concessions on a wide-spread basis.
Thinking of selling a home in Boca Raton?
Thinking of buying a home in Boca Raton?
Please call us at 561-213-6139
Marc Jablon, the Jablon Team
Re/Max Complete Solutions