Enjoying the drama in Washington, along the southern US border, on social media, in cafes and locker rooms everywhere? There are unusual times in America. On the local scene, we have unusually low levels of inventory after years of buyers taking what they can find and very few builders providing new production for sale. Now that we have pretty much scraped the barrel clean, it will be quite interesting to see what happens to prices.
For example, the inventory turnover is, on average, less than 3 months for homes under $500K in price. That means the entire inventory of homes listed for sale under that price will be sold in 90 days or less. But why, you ask, will some homes still be around longer? New listings come along almost as fast as the current ones sell, so there is rapid turnover, but not all homes sell in 90 days. The ones that sell first are in the best condition, are priced to sell (not obviously overpriced) and are suitable for investors or for buyers to get financing.
Between $500K and $1 million, homes take a bit longer to sell, but still go fairly quickly using historical measuring trends. The Absorption Rate chart provided by this blogger (see left margin for access to view or download or print) indicates four and a half months for homes to sell, on average, between $500K and $1 million. That is well below what is generally defined as a balanced market period of time = 6 months.
Even homes above $1 million are selling in less than a year, again provided they are in good condition and are not too weird such that they don’t appeal to the average buyer. Just putting a million plus price tag on a home does not mean it will sell in a year. It might be a crazy floor plan, poorly decorated, near a major highway or just not built very well.
2019 will be a watershed year for our residential real estate market in the City Different. Based on our MLS stats, there shouldn’t be any homes left for sale by the end of the year. Watch carefully to see where the new listings come from. Some may be newly built homes, though not enough; some owners might decide its time to downsize or move on to greener pastures, some families will be going through changes, such as job loss or severe illness or death, or divorce can create a situation where a home becomes for sale.
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Thanks for visiting and for your support over the years. Contact me if you have a real estate issue that would benefit from consultation.