If you are in the real estate business, quite often friends and neighbors ask you ‘How’s the real estate market these days?’. There are many elements of a market place and many ways to gauge improvement or decline. Here are just a few:
1. New construction has several categories; Permits (prior to building a new home, the builder must take out a permit, usually from the county building department), starts (after the permit is issued you have a certain period of time to start the new house, usually up to two years), pending sales and closings. Each month these numbers are announced, along with revisions of prior months.
2. Residential resale homes have several categories. Inventory of properties for sale (this can be divided into pre-foreclosure, foreclosure, short sale, normal sale), pending sales and closings.
3. Home prices, which can move higher or lower each month. Price comparison to past sales, closing price compared to asking price, price compared to market price. Right now we are seeing most prices improve based on the S&P/Case Shiller index of 20 metropolitan areas.