Today’s real estate market is seeing a “supply and demand” issue. Simply put, there are not enough homes for sale in relation to what the home-buying market is demanding.
Here is a guideline for pricing in various housing-demand markets:
1-4 months supply – This is a seller’s market in which there are not enough homes for the buyers’ demand. Homes appreciate in this type of market.
5-6 months supply – This is a balanced market and historically home values appreciate a bit above inflation.
7-8 months supply – This is a buyers’ market in which the number of homes for sale exceeds demain. Depreciation follows in this type of market.
In our region, we are currently experiencing a 4.1 month supply of homes for sale. This is the fewest active listings in the past eight years.
Nationally, there is a 4.2 month supply of homes available for sale which is the lowest seen since April 2005.
Information courtesy of the KCM Blog.