REIPRIME Logo
Intermediate1 hour16 terms

Real Estate Inventory: Key Market Terms

This curated collection offers key terms that might be helpful when exploring real estate market inventory dynamics. It's designed as a quick reference to understand commonly referenced concepts and metrics related to how long properties stay on the market, supporting your investment analysis.

Term Collection

1

Appraisal

An appraisal is an unbiased, professional opinion of a property's market value, conducted by a licensed appraiser, primarily used for lending, buying, and selling decisions.

Intermediate14-15 min
2

Comparative Market Analysis

A Comparative Market Analysis (CMA) is an informal estimate of a property's value based on recently sold, active, and expired listings in the same area, used by real estate professionals to help buyers and sellers determine a competitive price.

Intermediate15-18 min
3

Holding Costs

Holding costs are the recurring expenses associated with owning a real estate property, such as property taxes, insurance, utilities, and mortgage interest, incurred from acquisition until sale or consistent income generation.

Intermediate14-15 min
4

Pricing Strategy

A pricing strategy in real estate is a systematic approach used by investors and sellers to determine the optimal listing price for a property, balancing market conditions, property characteristics, and investment goals to maximize returns or achieve a quick sale.

Intermediate5 min
5

Market Liquidity

Market liquidity in real estate refers to the ease with which a property can be converted into cash without significantly impacting its price. It's a critical factor for investors assessing the flexibility and risk of their real estate holdings.

Intermediate5-6 min
6

Days on Market

Days on Market (DOM) measures the number of days a property listing remains active on the Multiple Listing Service (MLS) before going under contract. It indicates how quickly properties are selling in a specific area.

Beginner2-3 min
7

Real Estate Market Cycle

The Real Estate Market Cycle refers to the recurring, non-linear pattern of expansion and contraction that characterizes real estate markets, driven by economic, demographic, and supply-demand factors.

Intermediate16 min
8

Absorption Rate

The absorption rate measures the pace at which available properties are sold or leased in a specific market over a given period, indicating the balance between supply and demand.

Intermediate13-14 min
9

Seller's Market

A real estate market condition where low inventory and high buyer demand give sellers a significant advantage, leading to higher prices and faster sales.

Intermediate11-12 min
10

Inventory Turnover

Inventory turnover measures how quickly a company sells its inventory and replaces it. In real estate, it is a critical metric for developers and fix-and-flip investors to assess how efficiently they convert properties into sales, directly impacting liquidity and profitability.

Intermediate5 min
11

Buyer's Market

A buyer's market is a real estate condition where the supply of available properties exceeds the demand from buyers, giving buyers more leverage in negotiations and leading to potentially lower prices and more favorable terms.

Intermediate15-18 min
12

Real Estate Exit Strategy

A real estate exit strategy is a predefined plan for how an investor will liquidate or conclude their involvement with a property, aiming to realize profits, recover capital, or mitigate losses.

Intermediate13-14 min
13

Vacancy Rate

The vacancy rate is the percentage of all available rental units in a property or market that are currently unoccupied or not generating income, serving as a key indicator of a property's financial health and market demand.

Beginner13-14 min
14

Supply and Demand

Supply and demand are fundamental economic principles describing the interaction between the availability of real estate (supply) and the desire for it (demand), which collectively determine property prices and market conditions.

Intermediate13-14 min
15

Due Diligence

Due diligence is the critical process of investigating and verifying all material facts about a property and its financials before a real estate acquisition, aiming to identify risks and ensure an informed investment decision.

Intermediate14-15 min
16

Value-Add Strategy

A real estate investment strategy focused on acquiring underperforming properties and increasing their value through renovations, operational improvements, or repositioning to boost Net Operating Income (NOI).

Intermediate15-18 min

Common Questions