Question

There have been 45 sales in the subject neighborhood within the last 9 months. There are 35 properties currently listed for sale on the market. How many months' inventory is currently on the market?

a. 5
b. 7
c. 9
d. 11

Answer 1

The months' inventory on the market is calculated by dividing the current number of properties for sale by the average monthly sales rate. With 45 properties sold in the past 9 months and 35 properties available, the market has 7 months' inventory.

Step-by-step explanation:

To calculate the months' inventory on the market, we need to determine how many months it would take to sell all of the currently listed properties based on the rate at which properties have been selling. To do this, we can follow these steps:

1. First, find out the average number of properties sold per month, which is the total number of sales in the last 9 months divided by 9. This would be 45 sales / 9 months = 5 sales per month.
2. Next, calculate the months' inventory by dividing the number of properties currently listed by the average number of properties sold per month. In this case, it's 35 properties / 5 sales per month = 7 months.

Therefore, based on the information provided, there is a 7 months' inventory currently on the market, which corresponds to option b.