March 18, 2019
November 2018’s Rise in Housing Inventory
Every market has its two sides. Depending on which side you’re on, a market may be either great for you or in a zone that is unfavorable. (And then of course there are market crises, in which case everything is bad for everybody—but we are going to set that aside for the purposes of this post.) Generally these two sides fall on the supply and demand ends of the economic spectrum. In the real estate market these two shapes of market are referred to as “seller’s market” and “buyer’s market.” When inventory is low, prices usually go up, demand is put under a pressure cooker, and this usually results in sellers being able to raise the prices at which they are willing to part with their properties—within reason, of course. When inventory is high, prices usually go down (or stop rising at any rate), the pressure on buyers disappears, choice increases, and buyers feel they can wait a bit longer and increase their search time to find a house that more exactly matches their criteria. In November, we saw the real estate market move tentatively into this space.
Don’t get us wrong: the average price of housing did not drop during this time. Rather, the average price of housing decreased its growth. But even this has been enough to result in a net increase in housing inventory available. To wit: while the prices of houses sold increased 3.3 percent on a year-over-year basis in November 2018, that number represents a decrease from previous growth percentages of four percent and higher, a run which ended in September after a solid 77-month bloc. This is why it is important: it is a change from what had become the relative norm for years before.
Moreover, this slowing in house prices came alongside a decline in sales of a full eight percent.
This all resulted in the inventory of available housing increasing by five percent during the same year-over-year period, which is the fastest rate of growth in available inventory in three years.
If trends continue on their current path, we will likely continue to see this buyer’s market becoming the new relative norm for a period of time.
When a buyer finds that just-right home, Topouzis & Associates, P.C. acts as a bulwark against problems of the past. We do title searches and ensure a buyer is gaining clear title to the new property—and we back our services with offerings of title insurance (click here), in case someone along the line of ownership did something that will weaken title at some point in the future.