Understanding Months Supply of Inventory in Real Estate #housingmarket
Locust Grove, McDonough, Jackson: Which city has a higher Months Supply of Inventory (MSI)?
Locust Grove city has a higher monthly housing inventory than McDonough and Jackson cities. This is because they have more Active Homes that are new construction. In order to get an idea of what this means for the future of Locust Grove, it's important to understand how monthly supply inventory works.
What is Months Supply of Inventory (MSI)?
In order to calculate monthly supply inventory, you first need to know two things: the number of active listings, and the average number of sales per month. The number of active listings is pretty self-explanatory—it's simply the number of homes that are currently on the market. The average number of sales per month is a bit more complicated. To calculate this, you take the total number of homes sold in a given year and divide it by 12 (since there are 12 months in a year).
For example, let's say that there are 100 active listings in Locust Grove and 10 homes are sold each month. This would give us a monthly supply inventory of 10—which means that, at the current rate of sales, it would take 10 months for all of the homes on the market to be sold.
What Does This Mean for Locust Grove?
A higher monthly supply inventory can mean a few different things. For one, it could mean that there are simply more homes on the market than there are buyers—which could lead to prices dropping in an effort to attract buyers. Alternatively, it could mean that buyers are taking their time to make sure they find the perfect home, since they know they have plenty of options to choose from.
Of course, it's also worth noting that a higher monthly supply inventory doesn't necessarily mean that there's anything wrong with Locust Grove—it could just be that McDonough and Jackson have fewer homes on the market overall. However, if you're thinking about buying a home in Locust Grove, it's something definitely worth keeping an eye on! Conclusion: Locust Grove has more Active Homes that are new construction than McDonough and Jackson—and as a result, their monthly housing inventory is higher. While this doesn't necessarily mean anything bad for Locust Grove, it's something potential homebuyers should keep in mind when considering their options.
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