Everybody bandies about the terms Buyer's market and Seller's Market but do they or more importantly you know what they mean.
The most basic definition of a buyer's market is when the supply exceeds the demand. We see that in lots of places today...I'm thinking cars. That's a good start but how about when it comes to real estate, can we be a little more precise? I found a good article online entitled "How To Spot a Buyers Market" It states that a buyers market is when you have greater than a 6 month inventory of homes.
I decided to take a look at the numbers, using the entire year of 2008 plus January of 2009, here in Loudoun County to see exactly which type of market we're in.
I first looked at Solds -remember though a settlement usually occurs 30 to 60 days after contract signing, so this is not a good indicator of how many people are looking for and contracting homes in the month.
MONTH #OF MONTHS SUPPLY
1/08 14.97
2/08 12.57
3/08 9.79
4/08 8.44
5/08 6.82
6/08 6.04
7/08 5.99
8/08 5.49
9/08 6.19
10/08 7.10
11/08 7.9
12/08 6.03
1/09 8.05
From these numbers, you can see how, as we went through the spring market, the numbers hovered around the 6 month mark and in some cases dipped below a 6 month supply and as we went into the winter months the supply increased. The numbers in December are skewed since many REALTORS enter their new homes sales at the end of the year.
Also note that January of '08 and '09 are remarkably different. The inventory has gone down by about 6 months! And in January of '09, there were 2,288 active listings. The last time we saw a number that low was in August of 2005 which was when the market in our area started to change.
Here's the same information using pendings-homes that went under contract in the month
MONTH #OF MONTHS SUPPLY
1/08 8.53
2/08 7.90
3/08 6.42
4/08 5.35
5/08 5.38
6/08 5.30
7/08 5.35
8/08 4.97
9/08 4.78
10/08 6.37
11/08 6.36
12/08 5.91
1/09 4.94
Wow!! Look at those numbers. For most of 2008, using the classic definition, we were in a seller's market!! I know, I know..you're probably thinking,"it sure didn't feel like it!!" Yes, the prices are down. This is due to the number of bank-owned properties that are out there. But the reason we're seeing these numbers is due to the shrinking inventory. And here's the data , if you're so inclined to look at this information yourself.
So, if you're thinking about buying, what are you waiting for? Everybody else to jump in the pool? THEY ARE!! Want to be one of 12 offers??? THAT'S HAPPENING TOO! Prices to go up? IT WON'T BE LONG!
And, if you're selling, what are you waiting for?
Comments(3)