A faster turnaround for todays sellers these days it purely due
to low inventory levels. The average time for a home to be on the
market is now 69 days, a figure that is down 30% in comparison to
the previous year where it was at 98 days. This current Real Estate
markets listings are now reflecting the closing dates to be within
6 weeks of the home becoming available for sale when there is
roughly a 6-month supply of properties on the market. In another
comparison, inventory levels actually do remain low with a 6.4
month supply of homes currently on the market in July, down 31.2%
from a year ago. Last year there was a 9.3 month supply of homes on
the market showing just how drastic of a change that has
occurred.
It is clear that there is a give and take balance between
inventory and time on the market. In fact, the Chief Economist at
the National Association of Realtors, Lawrence Yun even went on to
comment on the issue stating, “As inventory has tightened, homes
have been selling more quickly. A notable shortening of time on
market began this spring, and this has created a general balance
between home buyers and sellers in much of the country. This
equilibrium is supporting sustained price growth, and homes that
are correctly priced tend to sell quickly, while those that aren’t
often languish on the market. Our current forecast is for the
median existing home price to rise 4.5 to 5 percent this year and
about 5 percent in 2013, which is somewhat stronger than historic
norms because of the inventory shortfall that is most pronounced in
the low price ranges. Factoring out short sales, the median time on
market for traditional sellers appears to be in the balanced range
of six to seven weeks. Ironically, if housing construction doesn’t
pick up to normal levels within two years, supply shortages could
be sustained for an extended period and lead to above average
appreciation. Therefore, any unnecessary hindrance to housing
starts, such as excessive local zoning regulations or stringent
bank capital rules for construction loans, should be carefully
re-examined.”
Some wonder how this compares to the infamous housing boom in
2004 and 2005 when inventory levels were at an astonishing low. The
medium selling time in those days was just 4 weeks which caused
such a rise in their price points. At this time the average annual
Consumer Price Index (CPI) was at 3.1% which was far less than this
rise in prices during the same period which was 10.3%. In 2009
however, the medium time a property was on the market until it sold
was at 10 weeks, a record low. Today we can see that the projected
CPI growth is at 2.3% for 2013 after being at 2.1% for 2012.
More Information: Realty Times