Homes for sale vs. homes sold: Take the poll
Here's a stab at the second one: when the number of people trying to sell isn't so much higher than the number of people buying. There were about four-and-a-half homes on the market for every one that sold in 2000, before the boom. In 2005, when you could stick a "for sale" sign in your yard one day and take it down the next, that figure dropped to two.
Last year? Eleven.
This is known in the biz as "months supply." At the rate people are buying homes, it would take 11 months to turn all the listings into sales if nothing else came on the market.
Some say a four-month supply is normal. Some say five. Some say six. I wish we had decades of home sale statistics for our area, but Metropolitan Regional Information Systems' numbers start in the late '90s.
For argument's sake, let's say 2000 was our normal. When do you think homes for sale vs. homes sold will get back to that point? (And remember, it's not the same question as "when will sales increase.")
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Comments
Normal... implies a myriad of circumstances related to the CHOICE to sell or the NEED to sell and that price is only one relatively small part of. The general and growing economic anxiety will only exacerbate this.
I don't recall exactly how I phrased my 'other' response to the last poll but like that one I'll again say that to reassert some normalcy to the market is beyond just time. The general and growing economic anxiety will not help this.
You stated above "At the rate people are buying homes". I'm curious if you know how many of these sales are in the "normal" category... unencumbered by some duress and being bought for use by the buyer rather than as investments.
My curiosity is based in an assumption that in the "normal" market most buyers have to sell first (and it goes on from there).
Posted by: MrRational | January 30, 2009 6:43 PM
MrRational, I don't know how many of the sales are non-duress. But RealtyTrac recently said that a lot of foreclosures aren't even listed for sale yet, which suggests that this shoe hasn't really dropped.
Posted by: Jamie Smith Hopkins | January 30, 2009 7:52 PM