Myths of Real EstateStatement: More or less than six months of inventory means it's a buyer's or seller's market, respectively. Answer: True. "We've found that to be pretty accurate in Texas," says Dotzour. "When inventory levels are below six-and-a-half months, prices and appreciation rates start to increase. When inventory levels are at six-and-a-half months, prices still go up, but at a slower rate. When inventory levels get up around nine, 10, or 11 months, prices and appreciation rates flatten out and start to drop." Exception: "So many other factors affect whether a market is a seller's or buyer's market," says Delaney. "For example, a market may be growing by double-digits every year-with new employers creating jobs-and six months' inventory might not be near enough to meet anticipated demand over the short term." |
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