Housing Inventory Is at a 30-Year Low

Housing inventory has hit a 30-year low. How does this shortage impact you as a homebuyer or seller?

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New data from CoreLogic shows that even though buyers turned out en masse in the first quarter of 2017, homeowners did not make the jump to list their properties for sale in the second quarter.

As a result, housing inventory for the second quarter hit a 30-year low!

Sales are slowing down, but it’s not due to lack of affordability—it’s the low inventory levels.  

Unsold inventory in the second quarter was at 1.9%, which is the lowest second quarter reading we’ve had in over 30 years.

The second quarter of 2017 posted the lowest inventory we’ve seen in 30 years!

Thanks to low inventory, home prices are marching even higher, which is good news. Home prices are up 50% since the market dropped. Back when the market was shifting, I had to be very diligent when talking to potential sellers about their equity position because 50% of them—if not more—were upside down. It’s very rare to see that these days, so we are in a better equity position overall.   

Low mortgage rates are keeping the market very affordable. However, affordability will be a challenge in the years ahead until we resolve this inventory shortage.

Inventory across the United States has been down for 25 consecutive months. According to the National Association of Realtors, we now have a 4.3 months supply of inventory, which is pretty much a seller’s market.

That said, real estate is local. Here in Richmond, market conditions for start-up homes or trade-up markets are very hot right now. Homes below $250,000 are selling quickly, and homes below $200,000 are getting multiple offers. That’s great news for sellers.

Here’s the caveat: If you are a luxury or premium homeowner, the market in Richmond is following a similar pattern as the rest of the country. The luxury market is a buyer’s market. There is much less demand, and it doesn’t look like that will change anytime soon.

If you are a seller in the $250,000 and under price range, you have a great opportunity to sell in a seller’s market and move up to the luxury home market.

So, if you are thinking of selling your home, now is a great time to do so. If you would like to learn more details about your local market or you’re curious about what your home is currently worth, just give me a call or send me an email. I would be happy to help you!