Supply and demand in real estate is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).
Here is a guideline for pricing in various housing-demand markets:
1-4 months supply – This is a seller’s market in which there are not enough homes for the buyers’ demand. Homes appreciate in this type of market.
5-6 months supply – This is a balanced market and historically home values appreciate a bit above inflation.
7-8 months supply – This is a buyers’ market in which the number of homes for sale exceeds demain. Depreciation follows in this type of market.
In our region, we are currently experiencing a 4.1 month supply of homes for sale. This is the fewest active listings in the past eight years!
Nationally, there is a 4.2 month supply of homes available for sale which is the lowest seen since April 2005.
If you are thinking about selling, now is the time! Call me!
Information courtesy of the KCM Blog.