According to NAR, home inventory down
(Sept. 21, 2012) In a news release issued by the National Association of Realtors earlier this month, a new statistical measurement shows the typ- ical amount of time it takes to sell a home is shrinking, well below the cyclical peak reached in 2009.
It was also reported that nationally, the median time a home was listed for sale on the market was 69 days in July, down 29.6 percent from 98 days in July 2011. But in Worcester County, our numbers are quite different at 180 agent days on market for single family homes over the past year as of August 2012.
The other important measure, though, is total supply of homes on the market at the current sales pace. Nationally, at the end July, there was a 6.4-month supply of homes on the market at the current sales pace, which is 31.2 percent below a year ago when there was a 9.3-month supply. Our local figures for Worcester County are similar in the percentage drop, but we are carrying a higher supply than the national average — at the end of August, there was a 12- month supply of homes on the market at the current sales pace, which represents a 33 percent drop over a year ago.
NAR’s chief economist, Lawrence Yun, said there is a clear relationship between inventory supply and time on market.
“As inventory has tightened, homes have been selling more quickly,” he said. “A notable shortening of time on market began this spring, and this has created a general balance between homebuyers 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.”
NAR’s forecast is that median existing home prices will rise 4.5 to 5 percent in 2012 and about 5 percent in 2013.
“This is somewhat stronger than historic norms because of the inventory shortfall that is most pronounced in the low price ranges,” Yun said.
“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,” he said. “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.”
The National Association of Realtors ®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
The new days-on-market figures, which will be included in future existinghome sales releases, are derived from a monthly survey for the Realtors® Confidence
Index, posted at www.Realtor.org. The median time on market includes all listings, which can be misleading at times because an abundance of fresh listings can skew the average downward. Previously published data were expressed in ranges of selling time, but the data has been adjusted to also show median selling time; calculations date to May 2010.
— Lauren Bunting is a member of the Coastal Association of Realtors and a licensed REALTOR® with Bunting Realty, Inc. in Berlin.