"Housing Supply" is usually a comparison of how many buyers are in the market to buy as it relates to the number of sellers in the market to sell.  Consider these two, very different examples....

• 10 buyers are buying per month, and 60 homes are on the market for sale
  
• 10 buyers are buying per month, and 600 homes are on the market for sale
  

In the first example, there are 6 "months of supply" on the market.  If buyer demand stays steady (10 buyers per month) it would take six months to sell all of the existing inventory of homes for sale.

In the second example, there are 60 "months of supply" on the market.  If buyer demand stays steady (10 buyers per month) it would take 60 months (five years!) to sell all of the existing inventory of homes for sale.

When there are six months of housing supply available, many analysts consider a housing market to be in a balance between buyers and sellers.  If there are lower supply levels (for example, only three months of housing supply available) it would be a seller's market, with sellers having the upper hand as buyers fight over a small number of available houses.  If there are higher supply levels (for example, 15 months of housing supply available) it would be a buyer's market, with sellers pining over the comparatively small number of buyers in the market.

With that context, take a look at the chart above, which examines the number of months of housing supply available in several price ranges of our local housing market.  You'll notice that many price ranges are approaching that balanced level of six months of available supply:

• The under $200K market has not been terribly out of balance over the past year --- starting at eight months of supply last December, and having declined (that's a good thing) to seven months of supply today. 
   
  
• The $200K-$300K market was significantly less balanced (ten months of supply) one year ago, but is now down to only eight months of supply.
   
  
• The $300K-$400K market has shown the most improvement, down from 14 months of supply, to only eight months of supply.

While many price ranges are now much closer to a healthy balance between sellers and buyers, keep in mind that:

• The $400K+ market (not shown) is WAY out of balance with 33 months of supply.
   
  
• These figures are directly related to inventory levels, which have fallen 15% over the past year.  If lots and lots of sellers rush to put their house on the market in the Spring, these healthy supply levels could jump back up to less healthy levels.

If you're interested in even more specific data --- supply levels based on location, a custom price range, etc. --- just drop me a line at scott@HarrisonburgHousingToday.  I am happy, as always, to provide custom analysis to help you make the best real estate decisions.