Do Lower Housing Inventory Levels Matter In Our Local Market?


Do Lower Housing Inventory Levels Matter In Our Local Market?
By Scott Rogers • January 15, 2019
Inventory levels have fallen rather consistently over the past several years: Start of 2016 = 560 homes for sale Start of 2017 = 413 homes for sale Start of 2018 = 280 homes for sale And yet -- somehow -- buyers were able to buy pretty much the same number of homes for each of the past three years: 2016 = 1313 home sales 2017 = 1261 home sales 2018 = 1302 home sales So -- what gives? How does this work? Does it matter that inventory levels are much lower now than they have been over the past few years? Let's ignore, for the moment, any homes that come on the market and never sell and are taken back of the market. If we do so, then the information above might mean: 2016 = 1166 New Listings? Starting the year with 560 homes for sale, and selling 1313 during the year, and ending the year with 413 homes on the market would mean that around 1166 owners listed their homes for sale in 2016. (560 + 1166 - 1313 = 413) 2017 = 1128 New Listings? Starting the year with 413 homes for sale, and selling 1261 during the year, and ending the year with 280 homes on the market would mean that around 1128 owners listed their homes for sale in 2017. (413 + 1128 - 1261 = 280) 2018 = 1291 New Listings? Starting the year with 280 homes for sale, and selling 1302 during the year, and ending the year with 269 homes on the market would mean that around 1291 owners listed their homes for sale in 2018. (280 + x - 1302 = 269) So -- after all that -- Lower inventory levels at the beginning of the year (560 to 413 to 280) and during the year did not seem to affect the number of buyers who were able to find homes to buy. Sales stayed consistent-ish over the past three years despite these declining inventory levels. But -- Lower inventory levels make it less fun to be a buyer. Buyers have fewer choices at any given time and they will often have competition from other buyers when the home of their dream comes on the market. Lower inventory levels make the market move faster. With fewer options to choose from, buyers must be ready to act quickly. We saw this with a reduction in the median days on market over the past several years from 52 days to 33 days to 25 days. So, yes, lower housing inventory levels do matter -- mostly to buyers. Sellers are, usually, quite delighted to have lower inventory levels when they are ready to sell. Sellers will have less competition, and more likely to sell more quickly and negotiate less. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
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