This month’s Highlands Real Estate Report Card is a bit different than the ones in the past. One of the few things we have in common with most if this country is a real estate market shift. You hear a lot about an inventory shortage right now in the housing market. I am going to show you what that means in the Highlands with actual real time statistics, instead of just saying, “the market is turning. Inventory is low, and we are seeing a seller’s market creep up.”
First let’s define a couple of terms. Current Inventory is the number of homes listed for sale in the MLS (multiple listing service) on a specific day. For our purposes we will be using the 16th of each month since today is May 16th. Average DOM is the average number of days that a home was listed for sale before it was sold. Months Inventory is the number of months it will take to sell out of the current inventory at the current rate of sale. This is found by dividing current inventory by monthly sales. Monthly Sales is the number of homes that were sold from the 16th of one month to the 16th of the next month. As always, I am talking about single family residences. Condos are not included in my numbers.
Looking back in time, on this day in 2010 there were 152 homes for sale in the Highlands. In 2011 there were 148 homes for sale in the Highlands. In 2012 there were 130 homes for sale, and today there are 126 homes for sale in the Highlands. You may be thinking that the difference in 152 and 126 is not very much, but the difference comes with the rate of sale. The highest number of monthly sales for the entire year of 2010 was 49 sales, which was during the month between April 16th and May 16th. In 2011, the high was 54 sales, which was between May and June. Last year the high was 63 home sales, which was between July and August (and it was also a HUGE jump in monthly sales from anything previous). Between April 16th (last month) and today there have been 75 homes sold in the Highlands. At that rate we would sell out of homes in 51 days. These numbers are staggering!
People know that money is cheap right now. Interest rates are incredibly low and home prices are still below the peak back before the market crashed. There are also a lot of new loan programs that are offering low down payment options, some even have the possibility of zero down payment. This creates a very large pool of buyers. However, as you can see above, the market is less saturated and there are a lot fewer sellers. The real estate market is currently a win-win. Buyers are getting a deal in the way of financing, and sellers are starting to realize profit from sales instead of losses. Buyers can also take comfort in knowing that the property they buy today is most likely moving upward with the market.
You have to be prepared. To those of you thinking of selling your home this year: Get your home ready for market today. Do not waste time, do not put it off. Just because the real estate market is turning doesn’t mean your home can look like a disaster, it needs to be ready. To those of you thinking about buying a home this year: Get your finances in order and get pre-approved. Homes that are priced correctly and look nice are sold in 3 days or less right now, which gives you little time to dilly dally. You need all your “ducks in a row” to buy a home.
If you want suggestions on how to make you home ready to sell, ask me. If you want me to run numbers for your neighborhood like the ones above, ask me. If you don’t know who to call to get pre-approved to buy a home, I work with good local bankers every day, ask me.
502.509.9278 – firstname.lastname@example.org