It may be a surprising question to many considering we still have millions of homeowners across the country with negative equity and a slow, jobless recovery.
For many homeowners in North Atlanta who purchased at the peak of the market in 2006, the possibility of selling their home seems unrealistic.
Yet, today we have very low levels of residential inventory. In fact, we would have to go back to 2000 to see similar inventory levels for both single-family detached or attached (condos/townhomes).
More and more we are seeing multiple-offer situations or buyers rushing to make offers on new listings because they’ve missed out on other homes.
What constitutes a sellers’ market?
As you might expect; supply and demand. But we have to measure that supply and demand to see where the market may be. So we look at the months of supply we have based on the past demand. If we sell 1,200 homes over the past year and have 600 homes on the market, then we have about six months of inventory.
Six months of inventory is considered a balanced market. If inventory is higher, it’s a buyers’ market and if it’s lower — a sellers’ market. Looking at the numbers for North Fulton and comparing 2012 to much better years for home sales — it appears that we are very much in a sellers’ market:
This chart reflects single-family detached re-sales (not new construction). If we included everything, supply would be in the four to 4.5 month range, but still below a balanced market. It’s harder to capture the supply for all inventory because much of the new construction sales are pre-sales; those numbers aren’t reflected in our multiple listing system.
So, the question you may be asking is, why are some people still having a hard time selling their home?
Price points matter
While the numbers are very good indicators of the improving housing market in our area, it is not as clear cut as that chart would indicate. There are fewer homes available in the lower price ranges, much more inventory in the higher priced luxury market. So your price point and competition also impact your market.
If you’re a North Fulton home seller in the $250K – $299K price range, there are only four months of supply available right now, unlike the 16-month supply if you’re priced between $1 million – $2 million.
I expect inventory in the higher price ranges to improve later in 2013, but I also expect inventory to increase with much higher levels of new construction this year. Further improvement will hinge on unemployment and the ability of buyers to qualify for loans.
Bob Strader is a local realtor with The North Group of Keller Williams Realty. Visit his blogs liveincumming.com or liveinalpharetta.com or email him: email@example.com.