Based on my personal selling experience in Baldwin County AL this season, it has been difficult in some cases to find inventory for quite a few buyers and there have been fewer homes coming into the market. I have investors wanting to buy, but properties meeting their criteria are just not available. Ultimately, this is great for sellers as it will have an impact on home values, but buyers that are hesitating may be disappointed. Just as the housing values could not rise forever, neither could the loss of value and overload in inventory continue indefinitely.
New construction is strengthening in our area and I anticipate a continuation of the trend. Will there be an influx of foreclosures known as shadow inventory? Probably, but there is some pent-up demand due to the lack of inventory and buyers and investors are bound to make a grab for those. There seems to be a demand for rental properties so there is motivation for investors looking for that type of property.
In looking at the data provided by Alabama Center For Real Estate comparing May 2012 to May 2011 they are indicating by the following numbers that we have moved from a Buyer's Market to a Neutral Market in Baldwin County AL. How do these numbers shake out?
May 2012 2011
Median Price $183,313 $158,200
Average Price $256,523 $223,306
Units Listed 2989 3594
Months Supply 7 10
Total # Sales 440 353
Days on Market 187 191
As you can see looking at May numbers, the months supply of inventory is 7. The general consensus is a 6 month inventory or below is a Seller's Market. The current low interest rates do make it very favorable for Home Buyers, but again nothing lasts forever and a rise in interest rates of just a point or two seriously impacts the price of home a buyer can qualify for and monthly payments.
Has our market turned? Maybe...