The inventory of existing homes for sale nationally in today’s market was recently reported to be at a 3.6-month supply…
According to the NAR – National Association of Realtors latest The Existing Home Sales Report. Inventory is now 7.1% lower than last year at this time, this is the 20th consecutive month of year-over-year drops.
Historically, inventory must reach a 6-month supply for a normal market where home prices appreciate with inflation — This is a national statistic and the numbers tend to vary locally in Northern Virginia. Nationally anything less than a 6-month supply is considered to be a sellers’ market, resulting in the demand for houses outpacing the supply and prices go up at rates above inflation.
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As you can see from the chart below, the U.S. has been in a sellers’ market since August 2012, but last month’s numbers reached a new low in supply nationally — as well as in many local areas of Northern Virginia.
Recently Trulia revealed that not only is there a shortage of homes on the market in general, but the homes that are available for sale are not matching with the needs of the buyers that are house hunting.
Homes in general are considered to be in three groups by price for the area: starter, trade-up, and premium.
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Trulia’s market mismatch score measures the search interest of buyers against the types of homes that are currently available on the market. For example: “if 60% of buyers are searching for starter homes but only 40% of listings are starter homes, [the] market mismatch score for starter homes would be 20.”
The results of their latest analysis are detailed in the chart below.
Nationally, Buyers are searching for starter and trade-up homes and are coming up short with the listings available, leading to a highly competitive seller’s market in these categories. Ninety-two of the top 100 metro areas have a shortage in trade-up inventory.
Premium home-buyers have the best chance of less competition and a surplus of listings in their price range with an 11-point surplus, leading to more of a buyer’s market. The current market shows a clear example of how its possible to have both a Buyer’s and Seller’s market existing at the same time for different categories of homes.
“It leaves Americans who are in the market for a home increasingly chasing too fewer options in lower price ranges, and sellers of premium homes more likely to be left waiting longer for a buyer.”
Lawrence Yun, NAR’s Chief Economist doesn’t see an end to this coming any time soon:
“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range.”
Bottom Line
Real estate is very local. If you are thinking about buying OR selling this spring, let’s get together to discuss the exact market conditions for your Northern Virginia area home. Reach us directly on our website: www.comehomevirginia.com
:-Dave
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