Almost a decade after the 2008 financial crisis, U.S. home prices have climbed well out of negative territory. Looking back, it’s hard to believe that median home prices nationwide fell nearly 32 percent from a peak of $229,000 in July 2007 to $156,100 in February 2011. That’s a frightening drop. Today looks much different, with Zillow reporting an August 31 U.S. median list price of $254,900.
When is it a seller’s market?
A seller’s market has a lot of indicators, including low home inventory, a growing median list price, and good economic conditions with low unemployment. A good way to determine market status is to find the absorption rate, which is the rate at which available homes will sell over a time period. This simple calculation is used in the real estate industry to predict home prices and future sales. To calculate the absorption rate for a given area, first gather the following: