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 Market Terms Made Simple: Your Guide to Understanding Real Estate Trends

When it comes to buying or selling a home, the real estate market can feel overwhelming. Between shifting prices, fluctuating interest rates, and endless statistics, it’s easy to get lost in the numbers. That’s why I created Market Terms Made Simple — blog,  designed to break down key real estate terms so you can make smarter decisions in today’s market.

Whether you’re in Paso Robles, Templeton, Atascadero, or anywhere in San Luis Obispo County, these insights will help you understand what’s really happening behind the scenes.

Days on Market (DOM)

• What it means: The number of days a property stays listed before going under contract.

• Why it matters: A shorter DOM signals a hot market with strong buyer demand. A longer DOM gives buyers more negotiation power.

 Months of Inventory

• What it means: How long it would take to sell all active listings at the current pace of sales.

• Why it matters:

  • Under 3 months = Seller’s market

  • 4–6 months = Balanced market

  • 6+ months = Buyer’s market

Median Sale Price

• What it means: The middle price point of homes sold — half sold above, half below.

• Why it matters: Unlike averages, the median filters out luxury outliers and shows the true “middle” of the market.

Price per Square Foot

• What it means: Sale price divided by square footage.

• Why it matters: Helps compare homes of different sizes, though it doesn’t account for upgrades, views, or location.

 Absorption Rate

• What it means: The speed at which homes are selling.

• Why it matters: A high absorption rate means homes are moving quickly. A low rate means more options for buyers.

👉 Thinking about selling? Let’s check if buyers are moving fast in your area.

 Appreciation vs. Equity

• Appreciation: Your home’s value rising over time.

• Equity: The portion of your home you truly own after subtracting your loan balance.

💸 Interest Rate vs. Affordability

• What it means: Interest rates directly affect buying power.

• Why it matters: Higher rates reduce affordability, while lower rates often increase demand and drive prices up.

Active Listings

• What it means: The number of homes currently for sale.

• Why it matters: Tracking supply helps predict price trends before they hit.

👉 I track new listings weekly — sign up for my newsletter to stay ahead.

 Pending Sales

• What it means: Homes under contract but not yet closed.

• Why it matters: Pending sales give early insight into buyer activity and upcoming price trends.

👉 Want a sneak peek at what buyers are paying? DM me for a preview.

 List-to-Sale Ratio

• What it means: The percentage of list price sellers actually receive.

• Why it matters:

  • 98–100% = Buyers paying close to asking

  • Below 95% = Negotiation room

👉 Let’s check your area’s ratio before you price your home.

Understanding these market terms isn’t just for agents — it’s for anyone who wants to buy, sell, or invest with confidence. By tracking DOM, inventory, median prices, and absorption rates, you’ll have a clearer picture of whether it’s the right time to make a move.

Ready to find out how the market is doing in your area?

Are  you ready to buy, sell or invest?

• DM  @diannavond to get started Or sign up for my weekly newsletter to get fresh market updates straight to your inbox.