|In any given market, inventories fluctuate based on supply and demand considering area and price range. The National Association of REALTORS considers a balanced market to be a six-month supply of homes.
If it takes longer than six months to sell, it is thought to be a buyer’s market and less than six months, a seller’s market.
Nationally: The inventory of existing homes has been reduced to approximately 1.5 million houses which is 10.3% lower than a year ago. According to the Federal Reserve Bank of St. Louis there are 5.7 months’ supply of new homes currently on the market in the U.S.
Locally: In February we had 37 home sales (actual closings) and there were 109 pending contracts (sales with a loan typically take 30-45 days). There were total 398 listings in February of which 6 were new listings. So, we have 12.8 months of inventory valley-wide over all price points.
Of course, real estate is local and even within a neighborhood or a price point, we find differing levels of inventory and time on market. in certain price points, the existing inventory of homes is at an all-time low in the Wood River Valley.
Inventory has a direct impact on price. When demand is constant, but inventory is reduced, price tends to increase because the same number of people are trying to buy a smaller than normal number of homes.
If you are thinking of selling this year, consider that the most listings we typically see the most listings June-July-August. If you can get ahead of the masses, you will have less competition. Another thing to consider, if mortgage rates increase as predicted, the cost to buy is greater and consequently buyers can afford less home.