We help REALTOR® Associations and Multiple Listing Services across the country report on many different metrics, including dollar volume. It’s a data point that may not be reviewed that closely, but is an important metric nonetheless.
What is Dollar Volume?
Dollar volume is the sum of the sales prices of all homes sold during a given period in a selected geographic area.
It can be compiled for a month, a quarter or a full year; it doesn’t, however, divide the sum by units sold, which is the case with average sales price.
While it is interesting as a stand-alone figure, you can gain additional insights when you compare the dollar volume for the current period to the same period in the prior year, or to past years. We did this using InfoSparks and saw some noteworthy trends.
Trends Show Dollar Volume Increasing Significantly Over Prior Years
Throughout the last 12 months, several regions in the Midwest hit all-time highs in dollar volume. For example, areas in Minnesota, Michigan and Montana ended 2016 at dollar volumes of $16 billion, $15.4 billion and $1.1 billion, respectively.
We’ve also seen 10-year highs in eastern states such as North Carolina, South Carolina and Florida. While the dollar volume has been rising for some areas in the west for the past few years, all-time highs occurred in the mid-2000s.
We’ve observed home prices rising all year in most areas with steady sales, accompanied by falling inventories. Those are factors that could be contributing to the record increases in dollar volume.
Dollar volume is a good top-line measure of market activity. It's a handy metric to use in business planning and elsewhere, because it helps define the size of the pie. Agents and brokerages can use the metric to carve out and grow their own slices of the pie.