Who cares? You should (if you are considering buying or selling a home, that is). The percentage of homes in escrow can be a very telling indicator regarding the state of the market.

For example, a couple of years ago, certain parts of Marin County experienced an “Extreme Sellers Market” with over 55% of homes in escrow at any given time. Today, those same areas are likely to be in a “Neutral” market (e.g., about 30% of homes in escrow). Some other market segments in Marin fall squarely into the “Strong Buyers Market” category.

Of course, whether it is a Seller’s or Buyer’s market has a great impact on negotiations. As a buyer or seller, it is important to understand and appreciate the importance of the “Percent of Homes in Escrow.”

Below is a guide to interpret the numbers as they relate to non-luxury homes (e.g., homes under $2 million) in Marin:

• 0 – 10% of Homes in Escrow — Extreme Buyer’s Market
• 10 – 20% of Homes in Escrow — Strong Buyer’s Market
• 20 – 30% of Homes in Escrow — Buyer’s Market
• 30% – 35% of Homes in Escrow — Neutral Market
• 35% – 45% of Homes in Escrow — Seller’s Market
• 45% – 55% of Homes in Escrow — Strong Seller’s market
• 55% – 100% of Homes in Escrow — Extreme Seller’s Market

Like all statistics in real estate, the percentage of homes in escrow must be analyzed in conjuction with other numerical data to be understood in context, such as average and median sales prices, market segment, days on the market, number of homes sold, inventory, and absoption rates.

If you have any questions or would like to discuss this concept and how it impacts you and your assets, please e-mail me at Kyle@NorthBayRE.com.

This entry was posted on Thursday, July 26th, 2007 at 4:46 pm and is filed under Marin Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.