An article about the supply of starter homes available in some markets around the country from CNNMoney.com this morning states there is an 8 month supply of homes on the market right now.
That’s still a lot compared to the six-month supply that is expected in a normal market, but it is much better than it was. In March, there were nearly 2% fewer homes on the market than there were a year ago, and 21.7% fewer than the record of 4.6 million in July 2008.
In some areas, supplies are even bidding-war tight. In Denver, for example, supply has fallen to 5.7 months from 6.2. In Phoenix it has declined to 4.5 from 5.2; and in San Francisco inventory has halved, to 3.2 months from 6.5 last March.
I believe inventories in some of the hardest hit real estate markets are lower but so is demand by the typical home buyer. Decreasing inventory of homes in some of the hardest hit markets in the first quarter of 2010 can be attributed to government intervention thus statistics in those markets over the last year can not be relied on.
When a market bottoms out, the type of buyer changes. Real estate investors begin buying alongside regular home buyers and the market is driven by low prices. I think that using that data to predict the future is the wrong way to do it. It’s no longer about the past, it’s about the future. If you are looking for a great revelation here, I don’t have one yet. But, I think the old way of doing things will not be as effective for the next few years while the housing market continues to stabilize.
The current inventory of all housing within Wake, Durham, Orange and Johnston counties is 13 months based upon 1/Q10 closings vs. 1Q/09 was also 13 months. If you base inventory levels on only the last 6 months, there is a 10 month supply.*
Raleigh Home Inventory 1st Quarter 2010: Click to enlarge*
I am hearing some buzz that the Home Buyer Tax Credit could be proposed again later this year.
The Raleigh market is prime for home buyer’s who are able to buy a home now. If you are interested, then you should be working with an experienced agent and mortgage lender. This is not an easy market to navigate but forging ahead makes a lot of sense. Rates are phenomenal, homes are plentiful and sellers are motivated.
*Market Update Summary of Residential Housing Activity. March, 2010. Published by Triangle MLS and edited by Stacey P. Anfindsen of Birch Appraisal Group, Cary, NC.