Reduced housing inventories… Good or bad?

Inventory of unsold homes is at the lowest level since the housing downturn began.

“It’s good news, maybe” according to Wall Street Journal real estate writer Nick Timiraos.

At the end of June, nearly 2.34 million homes were listed for sale on multiple-listing services in more than 900 metro areas, the lowest level for that time of year since at least 2007, according to Realtor.com. In some cases, inventory levels are at their lowest levels since the housing downturn began five years ago.

Shrinking inventory often is seen as a positive sign for housing because it usually means demand is rising, which often leads to higher prices. But in the current environment, the decline in inventory may instead reflect how the market remains anything but healthy. While sales are picking up in some cities, analysts say the sharp decline in inventory also reflects the slow pace at which banks are processing foreclosures.

Read more from Home Listings Fall but Woes Persist.

According to Triangle MLS, there are 7,660 homes for sale in Wake County and there have been 982 sales closed over the last 30 days. Based on that selling rate, that reflects a near 8 month inventory of homes for sale in Wake County.

The last 30 days of closed home sales in Wake County using records from Triangle MLS looks like this:

Average Home Sales Price Wake County

Average Home Sales Price Wake County for the last 30 days

  • The average price in Wake County is pretty consistent and ranges from the low to mid $200′s.
  • There are 4,062 homes for sale listed from $149,000 to $350,000
  • There are 2,063 homes listed for sale over $350,000

My opinion? There are a lot of good homes for sale but until they price their homes to what the market is telling them, they will not find a buyer. Statistics show that in 2011 only 28% of the houses listed for sale on MLS will sell. To get into that lucky 28% sellers have to watch the subtle changes that happen each week and move quickly to stay ahead of the depreciating market.