One of the time-honored ways to judge the strength of the real estate market is by the months of supply available at any given time. In order to derive this number, we take the houses currently listed, and divide by the average number of sales per month, to get the number of months it would take to "use up" the current supply. During the recession, most parts of the country had a huge backlog of homes listed, including many places with more than a year's worth of homes for sale.
Last week, I was on a call with owners of real estate firms across the country, and recovery was in full swing. The way they expressed this was in the decline of supply, making their areas more sellers' markets than buyers' markets, meaning that buyers no longer had the advantage of dozens (or hundreds) of homes to choose from, since supply had dropped in most places to a few months' worth at most.
In our market, we appear to be lagging, as I have said in recent posts. Although our market has improved a great deal, we still have a greater supply than other places. According to MLS figures, we have 7 months of homes under $300,000 available, 15 months of homes between $300,000 and 1 million available, and 31 months of homes over a million available. This last number means that, if no new homes over a million went on the market from today forward, it would take over 2 and 1/2 years at the current rate of sales for the current inventory to dry up.
It's not quite as black and white as it may sound. Many houses listed now may be overpriced, have something wrong with them, or may never sell. Therefore, a seller putting on a home now should not think that his/her own home won't move for over 2 years. He or she should, however, realize that aggressive pricing, especially in our area, is still important.
Showing posts with label market recovery. Show all posts
Showing posts with label market recovery. Show all posts
Monday, February 4, 2013
Tuesday, January 8, 2013
New Year, No More Fiscal Cliff
The page has turned to 2013, and everything seems to be pointing toward a continuation of the slow recovery that we've been seeing so far. In other parts of the country, things have moved faster, and the signs are even clearer. I just came back from Phoenix, and I remember reporting in other years that there were For Sale signs all over the place. This year, in the same complex, I saw two, and one was sold and came down while we were there.
Connecticut has a bigger supply of properties for sale. Things never got as bad, prices never went down as far, and therefore they are not popping back up as quickly. We still have spots where listings are hard to come by, but, by and large, there is a good choice for buyers in most areas. However, that could change as the year goes on. Interest rates are still low-very low-and prices are more flexible than usual. People who are moving here have been able to sell their homes where they came from, and, with the lowest apartment vacancy rate in the country, the New Haven area is a tough place to land a good rental. All those things cause sales.
In addition, the uncertainty in Washington has not gone away, but the immediate crisis has been averted. Some nervousness still exists, which makes the stock market dicier than usual, and that also helps real estate as an alternative investment. We are between two strong markets-Boston and New York-so that should help us as well.
Spring will tell more of the story. Will prices start to shoot up? If you are a buyer, you may not want to wait and see!
Connecticut has a bigger supply of properties for sale. Things never got as bad, prices never went down as far, and therefore they are not popping back up as quickly. We still have spots where listings are hard to come by, but, by and large, there is a good choice for buyers in most areas. However, that could change as the year goes on. Interest rates are still low-very low-and prices are more flexible than usual. People who are moving here have been able to sell their homes where they came from, and, with the lowest apartment vacancy rate in the country, the New Haven area is a tough place to land a good rental. All those things cause sales.
In addition, the uncertainty in Washington has not gone away, but the immediate crisis has been averted. Some nervousness still exists, which makes the stock market dicier than usual, and that also helps real estate as an alternative investment. We are between two strong markets-Boston and New York-so that should help us as well.
Spring will tell more of the story. Will prices start to shoot up? If you are a buyer, you may not want to wait and see!
Tuesday, December 15, 2009
Open Houses
Even though we are not in the traditional season for open houses, we've been surprised at how many people have been coming to the ones that have been held lately. We think it's a result of the tax credit, and the interest is stronger at the lower end of the price scale, but we're happy for the activity wherever it falls.
The moral of this story is that this may not be the typical holiday season, and that, if you are a seller, you may want to try harder to sell your home over the holidays. Don't make the assumption that the market will be dead until spring. Our November results were 80% ahead of our November results last year--we are clearly in the early stages of a recovery. While prices will lag for a long time after unit sales rise, there are clearly buyers out there.
The moral of this story is that this may not be the typical holiday season, and that, if you are a seller, you may want to try harder to sell your home over the holidays. Don't make the assumption that the market will be dead until spring. Our November results were 80% ahead of our November results last year--we are clearly in the early stages of a recovery. While prices will lag for a long time after unit sales rise, there are clearly buyers out there.
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