If you’re following what’s happening in the current housing market, you’ve seen how the lack of newly constructed homes is a major reason there’s a shortage of housing inventory available to today’s buyers. Another reason is that the inventory of existing homes for sale is shrinking. According to the most recent Existing Home Sales Report from the National Association of Realtors (NAR), sales are up 10.8% from the same time last year. That exceeds expectations and is great news.
The troubling news from the report is that the sold inventory is not being replaced. As NAR explained,
“Total housing inventory at the end of December totaled 1.40 million units, down 14.6% from November and 8.5% from one year ago. Unsold inventory sits at a 3.0-month supply at the current sales pace, down from the 3.7-month figure recorded in both November and December 2018. Unsold inventory totals have dropped for seven consecutive months from year-ago levels, taking a toll on home sales.”
The situation was also addressed in a recent Zillow article stating,
“The number of for-sale homes in the U.S. is at its lowest point in at least seven years, and the shortage appears poised to get worse before it gets better.”
Bill McBride of Calculated Risk further noted,
“Inventory always decreases sharply in December as people take their homes off the market for the holidays. However, based on the data I've collected, this was the lowest level for inventory in at least three decades (the previous low was 1.43 million in December 1993).”
A year ago, that was the case – but the market shifted again. Skylar Olsen, Director of Economic Research at Zillow, explains,
"A year ago, a combination of a government shutdown, stock market slump and mortgage rate spike caused a long-anticipated inventory rise. That supposed boom turned out to be a short-lived mirage as buyers came back into the market and more than erased the inventory gains. As a natural reaction, the recent slowdown in home values looks like it's set to reverse back to accelerating growth right as we head into home shopping season with demand outpacing supply."
Now is a great time to consider putting your home on the market. The competition (number of houses on the market) has not been this low in decades. It’s best not to wait for the inventory (both existing homes and new construction) to increase in the spring, as it always does.
When supply is limited, prices tend to firm up, homes on the market tend to sell faster and at a higher sell price to list price ratio. This means that for you as a potential buyer, you need to be prepared to move quickly once you find a home that you like. Do your homework in terms of pre-qualification for financing and by all means get a buyer's agent on your side. A buyer's agent works solely for you - not the seller. A buyer's agent is someone who can help you survey the market for available inventory and most importantly, someone who can help you craft an attractive and fair offer based upon current market conditions.
At EBR Savannah, we are strictly buyer's agents - we don't list homes for sale. This allows us to be independent and completely dedicated to helping home purchasers find the best home and the best possible price. We also can help you identify other resources you'll need to purchase a new home - from financing to insurance to moving.
If you are considering the purchase of a home in the Savannah area including Pooler, Richmond Hill, Rincon, Wilmington Island and Tybee Island, EBR is ready to help!