What Do These Numbers Mean in Real Estate?

“Get to know the market” is the first thing anyone, expert or novice, will tell you whenever you mention you might buy or sell a house. Not that this isn’t stellar advice, but it’s a little like asking someone, “How are you today?”

It’s instinctive and makes perfect sense, but you’re really just going through the motions. “I’m fine, thanks for asking!” Plus, the average real estate report is full of so many numbers and percentages that your eyes might glaze over.

More importantly, what does any of it mean to you when a big move is around the corner? In this post, we’ll endeavour to demystify all the stats so you can formulate a winning strategy for whatever the market is doing today.

Planning a move to Peterborough or Kawartha Lakes? Check out a few of our featured listings right here.

The Terms at a Glance

When scanning a report from any real estate board, you’ll see all kinds of terminology. Average price of a home, median price of a house, number of houses sold, number of days on market, number of active listings, and the percentage of change both year over year and month over month are the primary statistics you’ll discover. Let’s take a look at each in a little more detail.

Are you planning to sell your home in Peterborough? The posts below will help you succeed no matter what the market is doing:

Average Price of a Home

The average price of a house is when you add up the cost of every listing that sold over a certain timeframe and then divide that dollar amount by the number of transactions. Though this is a common statistic people like to refer to, it can be a bit misleading because it averages everything out from entry-level homes to multi-million dollar luxury estates and everything in between.

The average price can be useful when you’re dealing with an area without much variance between starter and upscale homes. If there are substantially more lower-end listings, the numbers can skew on the low side and vice versa.

Median Price of a Home

The median price is determined based on housing prices in the middle of the spectrum. For example, imagine that the real estate board reports a median price of $750,000. That means 50% of the houses in your area sold for less than $750,000, and the remaining 50% sold for a higher amount.

Since the median price isn’t influenced by extreme differences, it can be more useful when property types vary substantially. When property types are more similar, you might want to use average prices to inform your buying or selling strategy.

What should you look for when buying your next home? The posts below can help you make the right choice:

Number of Houses Sold

Just like it sounds, the “number of houses sold” accounts for how many transactions are reported through the MLS® for a particular timeframe. On its own, it doesn’t tell you much.

However, a number significantly higher or lower than the previous month and the previous year can indicate a shift in the market. The situation gets more complex if the number is higher than the previous year but lower for the month or vice versa.

This could simply mean a seasonal change in the market, which is to be expected at different times of the year. Alternatively, it could mean that a new long-term trend is around the corner.

Number of Days on Market

Again, this one is straightforward, referring to the number of days it takes before an average house sells. You need to look at the overall market for the number to be meaningful.

For example, 90 days on the market may seem like a long time. But there are no alarm bells as long as that’s the average. If it’s the outlier, buyers and sellers may take notice. A buyer might be worried the home has a stigma or too many expensive problems to fix. A seller will likely have to reconsider their price.

Alternatively, your home may be undervalued if it sells much faster than average. Making sense of all of these numbers and coming up with a competitive price is challenging, which means it’s a good reason to partner with a knowledgeable real estate agent.

Number of Active Listings

Here is another self-explanatory term that refers to the number of listings that are available during a given time period. High amounts of inventory could indicate a buyer’s market, whereas very few listings often suggest it’s a seller’s market.

Of course, this depends on how many buyers are actually looking for a home. Factoring in the number of active listings and how long each takes to sell can give you some hints as to your advantages and disadvantages in the market.

It’s important to keep the big picture in mind when analyzing market statistics. One piece of information doesn’t tell you much, but bringing them all together can help you create a realistic strategy for buying or selling.

Why would anyone want to live in Peterborough? The posts below will give you a few ideas:

The Market Is Relative

Buying or selling a house can be a confusing process until you remember that the market is all relative. If all signs point to a seller’s market, you can reasonably expect a high price and a fast sale. It’s advantageous for now – until your house sells and now it’s your turn to be the buyer. Now you realize how challenging these conditions are on this side of the transaction.

The reverse is also true. It can take a long time to sell your home and you may have to go back and forth with negotiations before finding a buyer when the market is slow. This can be frustrating. However, you’ll be thrilled once your sale closes and you find yourself buying a house with plenty of inventory available and sellers are willing to make concessions.

Whatever is happening in real estate is all relative depending on your situation. What matters is that you make the absolute most of your transaction on both sides. A local real estate agent is your number one resource for a seamless and efficient transition.

With expert guidance and an effective strategy, you’ll sell your home at the highest possible amount and buy in the same market for the lowest price and best terms. If you’re unsure of your next steps or want more insight as to what the latest statistics mean for you, it costs you nothing to reach out to a local expert.

Are you thinking about buying, selling, or investing in Peterborough real estate? Our local agents can help you craft a winning strategy in today’s market. Reach out to team@jeffandkatie.ca or call 705-243-9797 to start the conversation today.

Let Us Guide Your Journey

Curious about your real estate options? Relocating to the Peterborough area? Our experts are ready to help.

Book a Meeting