The Real Estate Market is Starving for Inventory
Winter has officially left us and we are entering real estate peak season. Buyers are ready and eager to get out and start shopping for their next home, but there is just one problem…there aren’t enough homes for sale. When the number of buyers exceeds the number of homes for sale, it is seller’s market. Right now in this kind of market, sellers are getting 100% of their asking price or more, and many are receiving multiple offers forcing buyers into a bidding war which ultimately drives the sales price up. Not only are sellers getting the money they want for their property, but they are also selling extremely fast. Homes are literally flying of the market, some selling within days or even hours of being listed. Realtors around the area are claiming that a home will sell before they even get a chance to schedule a showing for their buyers. It cannot be stressed enough that if you have been considering the idea of selling your home, NOW is the time because the market is literally starving for inventory!
The term “Months of Inventory” considers the number of homes on the market and the pace at which they are selling. The number basically means that if existing homes were to continue selling at the same rate as the most recent month of data, the current inventory of homes would be sold by that many months. Housing experts consider a market to be ‘normal’ or balanced when months of inventory is around 6. A number higher than 6 would mean there is too much inventory and we would be in buyer’s market. The Market Watch chart on the right shows that in March the months of inventory took a dip in the Greater Louisville market, reaching less than 4.5. Many of real estate professionals in our region who have been in the business for years have never seen inventory this low.
While sellers may reap the benefits of a low inventory market, buyers experience frustration with not being able to find the right house, or finding the right house and the seller accepts another offer. Many homeowners are hesitant to list their home right now in fear of not being able to find another one, however receiving a higher sales price in ample amount of time and little effort makes selling very appealing in this type of market.
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