Tale of Two Markets: Inventory Mismatch Paints a More Detailed Picture

A Tale of Two Markets: Inventory Mismatch Paints a More Detailed Picture | MyKCM

The inventory of existing homes for sale in today’s market was recently reported to be at a 3.6-month supply according to the National Association of Realtors latest Existing Home Sales Report. Inventory is now 7.1% lower than this time last year, marking the 20th consecutive month of year-over-year drops.

Historically, inventory must reach a 6-month supply for a normal market where home prices appreciate with inflation. Anything less than a 6-month supply is a sellers’ market, where the demand for houses outpaces supply and prices go up.

As you can see from the chart below, the United States has been in a sellers’ market since August 2012, but last month’s numbers reached a new low.

A Tale of Two Markets: Inventory Mismatch Paints a More Detailed Picture | MyKCM

Recently Trulia revealed that not only is there a shortage of homes on the market in general, but the homes that are available for sale are not meeting the needs of the buyers that are searching.

Homes are generally bucketed into three groups by price range: starter, trade-up, and premium.

Trulia’s market mismatch score measures the search interest of buyers against the category of homes that are available on the market. For example: “if 60% of buyers are searching for starter homes but only 40% of listings are starter homes, [the] market mismatch score for starter homes would be 20.”

The results of their latest analysis are detailed in the chart below.

 

Nationally, buyers are searching for starter and trade-up homes and are coming up short with the listings available, leading to a highly competitive seller’s market in these categories. Ninety-two of the top 100 metros have a shortage in trade-up inventory.

Premium homebuyers have the best chance of less competition and a surplus of listings in their price range with an 11-point surplus, leading to more of a buyer’s market.

“It leaves Americans who are in the market for a home increasingly chasing too fewer options in lower price ranges, and sellers of premium homes more likely to be left waiting longer for a buyer.”

 Lawrence Yun, NAR’s Chief Economist doesn’t see an end to this coming any time soon: 

“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range.”

Bottom Line

Real estate is local. If you are thinking about buying OR selling this spring, let’s get together to discuss the exact market conditions in your area.

Tinton Falls Condo Sales for November 2013

Tinton   Falls Condo Sales for November 2013
Address Complex/Subdiv List Price Sold Price DOM
4   SPRING MEADOW DR NONE 70,000 $70,000 117
9   GAIT CT FOX CHASE 159,900 $155,000 32
106   FRONTIER WAY PARK PLACE 199,000 $194,000 23
2   BUGLE WAY FOX CHASE 215,000 $210,000 46
7   MADISON CT PARK PLACE II 240,000 $225,000 35
73   MAYWOOD RUN FOX CHASE 265,000 $255,000 52
13   PIMLICO DR FOX CHASE 275,000 $265,000 115
64   MAYWOOD RUN FOX CHASE 289,900 $280,000 48
57   CHEYENNE ST HYDE PARK 310,000 $302,500 17

If your home is presently listed please disregard. This is not intended as a solicitation.All information is taken from Monmouth Ocean Multiple listing Service.Coldwell Banker does not represent that hits Agency has listed or sold all properties listed above

Red Bank Condo Sales for 2013

Red Bank Condo Sales for 2013
Address Complex/Subdiv Price Price DOM
34   MANOR DR RED BANK MANOR $189,000 $185,000 37
55-3   PROSPECT AVE COURTYARD $320,000 $299,000 118
94   TOWER HILL DR TOWER HILL $339,000 $322,500 56

If your home is presently listed please disregard. This is not intended as a solicitation.All information is taken from Monmouth Ocean Multiple listing Service.Coldwell Banker does not represent that hits Agency has listed or sold all properties listed above

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