Tuesday, January 3, 2017 / by Vanessa Saunders
The latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed a direct correlation between a lack of inventory and rising prices. Although we haven't seen such a dramatic increase as reported by NAR here in the Hudson Valley, we expect supply to be down as we enter the winter months.
We are all familiar with the concept of supply and demand. As the demand for an item increases the supply of that same item goes down, driving prices up.
Year-over-year inventory levels have dropped each of the last 18 months, as inventory now stands at a 4.0-month supply, well below the 6.0-month supply needed for a ‘normal’ market.
The median price of homes sold in November (the latest data available) was $234,900, up 6.8% from last year and marking the 57th consecutive month with year-over-year gains.
NAR’s Chief Economist, Lawrence Yun had this to say:
"Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country."
But there is good news about rising prices. More and more homeowners are recovering from a negative equity situation and learning that they are able to sell their homes and either move up to their dream home or downsize to a property that will better suit their needs.
Wise sellers will ignore the idea that winter is a bad time to sell and wait until spring. Low inventories also mean that the buyers looking now are seriously searching for a home and ready to pounce when they find what they want.
Buyer demand continues to outpace the supply of homes for sale. Listing your home in the winter attracts serious buyers who are looking to close the transaction quickly.