Real estate statistics: Understanding the terms behind the numbers
Published on July 15, 2022
While real estate is part of life, it does use technical terms that some may find intimidating. Do you really understand the terms used daily by the media and on real estate sites?
Let’s go back to the basics and define the terms used when discussing real estate statistics. This short guide will help you better understand the trends being reported on in our articles in The Real Estate Minute.
Summary:
- New listing
- Effective listings
- Number of sales
- Median selling price
- Selling time
- Months of inventory
- Type of market
- Percentage (or proportion) of overbids
New listing:
Every new property posted on DuProprio.com is known as a new listing. On the real estate brokerage side, a new listing is counted for each new brokerage contract that is signed.
Effective listings:
This statistic, recorded on the last day of each month, shows how many properties are on offer in a given real estate market. To get a picture of the inventory of real estate for sale over a year, we average the numbers of monthly listings.
Number of sales:
This means the number of properties sold in a given time period. Each website may calculate the number of sales differently. DuProprio and Quebec’s professional brokerage association (Association professionnelle des courtiers immobiliers du Québec, or APCIQ) record the date on which the property owner has accepted the offer to purchase and all the conditions have been lifted. However, JLR Land Title Solutions records a sale only when it goes through a notary.
Median selling price:
The median selling price represents the selling price that’s in the middle of a series of transactions: half the transactions were done at a price lower than the median price, and the other half of the transactions were done at a price higher than the median price. Generally speaking, the selling price is established from the median price of properties sold on the market. It’s calculated for a region or for a type of property (single-family, condo, multiplex, etc.) in order to get a more accurate picture. Unlike the average price (which is the sum of all selling prices divided by the number of transactions), the median price is not influenced by extremes. Here’s an example of the median price, calculated using six different selling prices:
Selling time:
This statistic refers to the number of days between the time the property first goes online on DuProprio.com (or when a brokerage contract is signed) and the selling date, that is, the time at which the offer to purchase is accepted and the conditions have been lifted. Note that JLR Land Title Solutions does not calculate this data. The selling time is influenced by market trends and by the seller’s pricing strategy.
Months of inventory:
This statistic gives an idea of the market’s vitality. It refers to the number of months that would be needed to sell all the properties currently for sale. It is calculated using the average number of properties sold per month over a given period.
Type of market:
The number of months of inventory tells us what type of market we currently have, meaning the selling and buying conditions in a given area. Based on the number of months that would be needed to sell all the properties for sale, the market can be considered to be balanced, or to be in either the sellers’ or the buyers’ advantage.
Percentage (or proportion) of overbids:
This is the percentage of homeowners who sold their property for more than the last listed price. The selling price is confirmed with the land registry as soon as it becomes available.
Are things clearer now? Great! You might want to save this guide in your favourites for easy reference when you’re next looking at market trends.
Want to know more about the visibility and support services offered by DuProprio to sell a home agent-free? Contact our customer service today at 1-866-387-7677, or watch this informational webinar:
