How to Read a Real Estate Market Report

What you'll walk away with

• What the key market statistics measure
• Five traps that make reports misleading
• How to use a report to ask better questions

In this guide

• The numbers, in plain English
• Five traps to avoid
• What to do with it

Market reports are everywhere, and the headline numbers can be misleading. Here is how to read them like a pro. When you want current figures for a specific town or price range, ask me for a custom report built from MLS data.

The numbers, in plain English

• Median sale price. The middle price: half of homes sold for more, half for less. It is less distorted by a few very high or very low sales than an average is.
• Days on market. How long homes take to go under contract. Compare the same type of home in the same area.
• Months of supply. How long current listings would last at the recent sales pace. Lower supply generally favors sellers and higher supply generally favors buyers, but there is no single magic cutoff, and it varies by price range.
• List-to-sale price ratio. Compares the final sale price to the list price, hinting at how much negotiating room there was.
• New listings and pending sales. Early signals of where the market is heading.

Five traps to avoid

1. Regional averages hide local differences. A metro-wide number can be wrong for your street. Always ask for the town, neighborhood and price range.
2. Small samples swing wildly. A town with few monthly sales can show big percentage changes from just a handful of homes.
3. Seasonality matters. Compare to the same month last year, not just last month.
4. Median is not "your" home's value. Condition, lot, updates and location drive individual value. That takes a comparative analysis, not a headline.
5. Definitions differ. Check which property types and date ranges a report includes.

What to do with it

Use the report to set expectations and ask better questions, not to predict the future. If you're selling, we'll look at comparable homes and current competition. If you're buying, we'll look at how similar homes have priced and negotiated. Nobody can guarantee where prices go next.

Statistics are drawn from MLS data when available and are deemed reliable but not guaranteed. A market report is not an appraisal, a comparative market analysis or a home valuation.

Market-report reading checklist

• Check which town, area and price range the report covers
• Look at the median, not just the average
• Compare to the same month last year
• Check how many sales the numbers are based on
• Confirm the property types and date range
• Ask for a custom report for your target area

About this guide

Joseph Ford is a licensed North Carolina real estate broker and REALTOR®, not an attorney, lender, tax professional or financial advisor. This guide is general educational information, not legal, tax, lending or investment advice, and it is not an offer or commitment to lend. Laws, forms, rates and program terms change; confirm current details with the sources linked above and with the appropriate professional. You are free to choose any lender, attorney, inspector or other provider, and I will never require you to use one I mention. Equal Housing Opportunity.