Remember the 3 reasons?
- Demand is Strong
- Supply is Low
- New Construction will soon be your Competition
Today we are talking about the 2nd reason to sell your house today:
Part II – Housing Supply is Low
A seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).
While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:
- 1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
- 5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
- 7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.
What is happening across the country right now?
In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is almost 20% below inventory numbers of just a year ago and at levels we haven’t seen since 2005.
Sellers have a great opportunity right now! Historically, inventory increases dramatically as we approach summer. Selling now while demand is high and supply is low may garner you your best price, and we’ve got the team to help you make that happen!
KCM blog, APRIL 9, 2013
