The price brackets used for Months of Inventory are, as I have found, remarkably broad. Up to about 900K, inventory levels usually remain the same. Above 900K, maybe $1M, things start to change. I didn’t think this would be constant across the various zips, but it is.
I a perfect world, I think Months of Inventory ought to be bracketed not by price but by price quartiles. However, most buyers/sellers who are shopping a particular price bracket want to compare between different areas, and they can get confused if you are changing price scales on them.
Anyway, I completely agree with your comments that the same price in two geo areas is different. What the MOI numbers show is that it doesn’t matter below 900-1M…they’re more or less the same. Above $1M, things can vary widely for MOI if you’re looking at 1-1.25 in Escondido vs. Solana Beach.
Anyway, here’s the point I was really trying to make but miscommunicated it…..The average days on market number promulgated by NSDCAR/SDCAR says that stuff is on the market for 60 days. That’s so wrong I can’t stand it. Especially when you look at Months of Inventory that shows, for example, 10 months of Inventory. (If you really believe you have 10 months of inventory, how can it be that market time is 60 days?) The point I was making is that median corrected market time is looking a lot closer to being correlated with Months of Inventory. I have been calculating MOI for a long time and saw this discrepancy (between avg market time and MOI) but was having a hard time understanding what was going on. Now that I’ve computed Median Market Time and found that it’s 120 or more days, that is getting a lot closer to 1/2 of Month of Inventory Time. It will be really interesting to see over the next six months if Median Market Time for upper price brackets really does track the MOI figures (which are as high as 36-48 months). With MOIs in upper brackets as big as they are, one would expect that Median Market Times will grow quite long, though price discounting will probably bring the Median Market Time figure down. Does that make sense or am I just jumbling it up?
