Buying In a Low Inventory Market
It’s no secret that the best time to sell anything is when the demand is high and the supply is low for that item. This is particularly true with selling a home. So if you plan on selling your home in Albuquerque, there’s great news. Two major reports released by the National Association of Realtors (NAR) shows that that now is a great time to put your home on the market in Albuquerque.
Here is the data covered in the latest REALTORS® Confidence Index and Existing Home Sales Report that shows this.
REALTORS® CONFIDENCE INDEX
Every month, NAR surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions.” This month, the index again showed that home buying demand continued to outpace the supply of homes available in January.
The map below illustrates buyer demand broken down by state. If you look at Arizona, you can see that buyer demand is strong in this state, which is great news is you plan on selling your home in Albuquerque
In addition to revealing a high demand for homes, the index also shows that compared to conditions in the same month last year, seller traffic conditions were strong in Arizona.
That shows that demand for housing continues to be strong, but supply is struggling to keep up, and this trend is likely to continue throughout 2018.
THE EXISTING HOME SALES REPORT
The most important data revealed in the report was not sales but was instead the inventory of homes for sale (supply). The report explained:
- Total housing inventory rose 4.1% from December to 1.52 million homes available for sale.
- Unsold inventory is 9.5% lower than a year ago, marking the 32nd consecutive month with year-over-year declines.
- This represents a 3.4-month supply at the current sales pace.
According to Lawrence Yun, Chief Economist at NAR:
“Another month of solid price gains underlines this ongoing trend of strong demand and weak supply. The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability.”
When it comes to selling a home in Albuquerque, when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see appreciation. Between 6-7 months is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and should expect depreciation in home values.
As we saw already, there is currently a 3.4-month supply, and houses are going under contract fast. The Existing Home Sales Report shows that 43% of properties were on the market for less than a month when sold.
In January, properties sold nationally were typically on the market for 42 days. As Yun notes, this will continue unless more listings come to the market.
“While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”
Inventory of homes for sale is still well below the 6-month supply needed for a normal market and supply will ‘fail to catch up with demand’ if a ‘sizable’ supply does not enter the market. If you plan on selling your home in Albuquerque, now is the time. You can find out what your home is worth in Albuquerque with our home valuation website