Inadequate Inventory Driving Prices Up

Real Estate Agent with Chapman Hall Premier Realtors

The latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed a direct correlation between a lack of inventory and rising prices. We are all familiar with the concept of supply and demand. As the demand for an item increases the supply of that same item goes down, driving prices up. Year-over-year inventory levels have dropped each of the last 18 months, as inventory now stands at a 4.0-month supply, well below the 6.0-month supply needed for a 'normal' market. The median price of homes sold in November (the latest data available) was $234,900, up 6.8% from last year and marking the 57th consecutive month with year-over-year gains. NAR's Chief Economist, Lawrence Yun had this to say:

"Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country."

But there is good news about rising prices. More and more homeowners are recovering from a negative equity situation and learning that they are able to sell their homes and either move up to their dream home or downsize to a property that will better suit their needs. Look for these homes to come to market soon.

Bottom Line

Buyer demand continues to outpace the supply of homes for sale. Listing your home in the winter attracts serious buyers who are looking to close the transaction quickly. 


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Pat Champion
Coldwell Banker Camelot Realty - Mount Dora, FL
Call the "CHAMPION" for all your real estate needs

Great post I was just talking about this with a customer the other day. Now is the time to buy not later. Thanks for sharing I hope you have a great afternoon.

Jan 03, 2017 09:39 AM #1
Tim Grissett

Thanks Pat , hope you had a awesome Holiday!

Jan 03, 2017 10:45 AM #2
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Tim, we are experiencing this same situation in Denver.   Too many buyers, not enough listings! 

Jan 03, 2017 11:10 AM #3
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