Inventory and the Market

When I wrote the June and May market reports, I noted that things are holding steady with regard to home sales and that the prices actually rose slightly.

Some may wonder why homes seem to be moving so slowly around the area when the numbers show that about the same number of homes are selling right now. The answer lies in the housing inventory, the number of homes that are for sale right now.

Every month, new listings appear on the market. I took a look at most of the decade today. About the same number of homes have been listed every month for years; between 55 and 65 new listings appear most months.

Looking at history, between 30 and 35 homes sold on average every month until last fall. Things slowed down for a while in 2008 and early 2009 with all the worry about the housing bubble, the presidential election and the economy.

Even though the number of homes sold dropped, the number being listed did not. This resulted in a build up of our housing inventory. This is why the days on market number is so much higher than this time last year even though we are currently selling the average number of homes every month once again. The market will even out, but in the short time we do have to work through the increased inventory.