Our Hot Market and its Low Inventory

It has been a little over a month since I’ve posted about the housing numbers of our region. If you remember, back in mid-June I posted about it being a sellers market based on my anecdotal experience as well as the feedback from fellow agents and the raw numbers seen in our MLS. My buyer clients were experiencing multiple offer situations on every house that interested them, a situation that nearly all Realtors were experiencing across our region. As for the raw numbers. on June 19th, the monthly supply of homes for our region was 1.36 which is well below the threshold for a balanced market - in short, the market in June was distinctly a sellers market.

Looking exclusively at the single family home numbers (not including condos, halfplexes, nor multi-units), there are currently 1,413 houses available and active on the market going into this weekend. That may sound like a lot, but we have to compare that number to how many homes on average have been selling in a 30 day period to determine how much housing supply that represents. For the months of May, June and July, we saw about 1,613 homes close each month. That means we currently have a 0.876 months worth of inventory, a roughly 35% tightening of the market over the past 6 weeks. If you are currently looking for a home to buy, this last month has been particularly tough. There are currently 2,846 houses that are pending sale. For every one house that comes on the market, two are coming off the market as they go pending sale. Inventory levels are continuing to trend down, which is increasing the amount of competition for the inventory that we do have. For the time being, the hot market shows no signs of cooling off.

And the consensus among real estate professionals continues to be that this hot market will continue into the foreseeable future. I’m hearing that from people here locally, as well as from Realtors and loan officers in various markets around the country. I don’t have any real times facts or experiences that contradict those outlooks, but I will say this: 2020 has been very volatile due to covid-19. In January and February, everything was hunky-dory. In March, everyone in real estate thought that the sky was falling. By mid April, the market began to stabilize. And in May, June and July the market has gotten hotter and hotter and hotter. But always keep in mind that unknowns still remain. The unemployment numbers may eventually hurt the real estate market, and covid-19 always has the potential to rattle the market like it did back in March. Low interest rates, which are now in the 2.5% range, continue to be a positive influence. Now more than ever it is important that you take all things into account when deciding whether now is a good time for you to buy or sell real estate.