The inventory of existing homes for sale in today’s market was recently reported to be at a 3.6-month supply according to the National Association of Realtors latest Existing Home Sales Report. Inventory is now 7.1% lower than this time last year, marking the 20th consecutive month of year-over-year drops.
This is consistent with the Raleigh market that is showing between at 3 and 4 month supply currently. The average time on the market for active listings is 109 days while the median time on the market is only 55 days. These two numbers have nosedived since January when they started at 131 and 90 days respectively. I discuss Raleigh market trends daily on my Twitter feed.
Historically, inventory must reach a 6-month supply for a normal market where home prices appreciate with inflation. Anything less than a 6-month supply is a sellers’ market, where the demand for houses outpaces supply and prices go up. Raleigh has consistently held a good return for homeowners and that is part of the reason it is always recognized in lists of the "Best Place To Live."
Recently, we have had seven of our listings that have sold in their first weekend on the market with multiple offers. Most of those offers were above the list price in order to be competitive. This is a direct result of the low inventory trend that we are seeing nationwide in the real estate market.
If you are thinking of selling your home in Raleigh for under $300,000 and buying a home over $350,000, it is the perfect time to move up to that dream home.
As you can see from the chart below, the United States has been in a sellers’ market since August 2012, but last month’s numbers reached a new low.
Recently Trulia focused on the Raleigh market and revealed that not only is there a shortage of homes on the market in general, but the homes that are available for sale are not meeting the needs of the buyers that are searching.
Homes are generally bucketed into three groups by price range: starter, trade-up, and premium.
Trulia’s market mismatch score measures the search interest of buyers against the category of homes that are available on the market. For example: “if 60% of buyers are searching for starter homes but only 40% of listings are starter homes, [the] market mismatch score for starter homes would be 20.”
The results of their latest analysis are detailed in the chart below.
Nationally, buyers are searching for starter and trade-up homes and are coming up short with the listings available, leading to a highly competitive seller’s market in these categories. Ninety-two of the top 100 metros have a shortage in trade-up inventory.
If you want to stay updated on market trends in Raleigh, you can follow our Twitter hashtag #realtyrdu.
Premium homebuyers have the best chance of less competition and a surplus of listings in their price range with an 11-point surplus, leading to more of a buyer’s market.
“It leaves Americans who are in the market for a home increasingly chasing too fewer options in lower price ranges, and sellers of premium homes more likely to be left waiting longer for a buyer.”
Lawrence Yun, NAR’s Chief Economist doesn’t see an end to this coming any time soon:
“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range.”
Real estate is local. If you are thinking about buying OR selling this spring, let’s get together to discuss the exact market conditions in your area.