We’ve heard it on the street, we’ve seen in on Facebook and Twitter, and we’ve seen it in our own neighborhoods: low inventory is a major story in the real estate market right now. While it is not a universal condition, a low inventory of homes on the market seems to be prevalent in many desirable areas. Inventory levels, the amount of time it would take to sell all existing homes on the market without any new homes being added, are dropping below normal (it varies by market but six months is often considered a good indicator). The low inventory situation exists both major cities and in some suburban areas. Let’s take a look at a few recent stories:
From the Denver Post: The number of showings per listing has risen as the housing inventory has fallen. During a stable market a typical inventory level would be around five to seven months, Boulder County’s inventory is 3.4 months.
From Oregon Live: In the Portland area December closed with fewer than 6,400 homes listed for sale. At that month’s sales rate it would only take 3.6 months to work through that supply. Average inventory level for the area is generally six months.
From the Seattle Post-Intelligencer: Sales of houses and condos In King County last year rose 19.9 percent, while the number of homes on the market fell by 36.9 percent. The inventory level fell from 6.7 to 3.4 months.
Los Angeles, California
From the Los Angeles Daily News: Warren Snyder, who co-owns Carriage Realty & American Broker Loans in Rolling Hills Estates was quoted as saying: “The short inventory count is causing people to pay more for the house. It’s supply and demand.”
From the Lubbock Avalanche-Journal: For the first time in several years, the Lubbock market’s existing months of inventory for December dropped below 1,300 homes or 4.5 months and officially transitioned from a buyer’s to a seller’s market, carrying last year’s strong recovery trend into 2013. Last year during this period the inventory level was around 6.5 percent.
West Palm Beach, Florida
From the Palm Beach Post: Palm Beach County Realtors have said one of their biggest challenges in recent months is a low inventory. T 4.7 in November, a 54 percent decrease from the same time in 2011. Condominium supply was at 4.8 months, down 47 percent from November 2011.
Raleigh-Durham, North Carolina
From the Triangle Business Journal: The Triangle MLS in North Carolina which covers an area including Raleigh, Durham, Cary and Chapel Hill areas, reported in December that the inventory of homes and properties listed on MLS in the region hit a new low with 11,802 homes listed for sale in December, which is about a 5.9-month supply level.
Portsmouth, New Hampshire:
From Fosters.com: The single family homes available for sale in the Seacoast area of New Hampshire at its lowest level since at least 2010, according to the Seacoast Board of REALTORS monthly survey of the 13-sample Seacoast towns.
New York, New York:
From NY1.com: The prediction for New York City is that inventory will remain low in 2013, especially because many sellers cannot afford to trade up or qualify for financing, so they are opting to stay put.
So what is a potential homebuyer to do? In our recent post on smart moves to make in 2013, Realtors® gave advice on backup offers and other strategies. If there is a home you like, be ready to take action because, from what we are seeing out there, it looks like it may not be on the market long.
How is the inventory in your market? Let us know in the comments below. We may include your information in a follow-up story, as inventory changes throughout the year.
By: Deidre Woollard