After taking sustaining a slowdown n April and May the housing market rebounded in June, beating out last year's sales for the same time period of 2018 by 9 sales.
We are also experiencing low inventory, so what does that mean for the type of market are we currently in? You've likely heard the terms like "buyers market", "seller's market" or a "balanced market". How do we determine what market it is? We look at months of inventory to give us an idea of what type of market we are in. So where are we at? Anything from 0-4 months is considered a seller's market, anything 4-6 months is considered balanced market, and anything with 6+ months of inventory is considered a buyers market.
Comparing where we are at today with the last 2 years of a "normal" market you can see in the graph that Months of inventory spiked in April as we set in for quarantine. This spike was mainly due to a reduction in demand and not an increase in inventory as there were a lot of unknowns during that time and people avoided making a decision. The months of inventory in April was 10.56 months which means if no more homes came on the market it would have taken 10 months to sell the homes on the market with the demand that was in April. If things continued at that pace it was a real buyers market.
What we saw transpire in the following months leading up to today is consumer confidence come back after the initial scare was over and people were aware of the risks, people could make educated decisions based on the "new normal". Consumer confidence is something you will hear me say lots, increased in May where months of inventory was reduced to 8.21 months and as the economy continued reopened in Mid-May to June consumer confidence increased moving the months of inventory to 4.71 months. June was on the fringe of a seller's market, and really depending on the home, there are some homes that would definitely be considered in the seller's market. The lack of inventory is creating this balanced-seller's market, we don't know if we will see a spike in inventory as financial positions continue to change or mortgage payment deferrals start to become due in October. Demand has appeared to remain stable, we are averaging around 130-150 sales on average a week which has continued into July.
We don't know what the future has in store, all we know is today.
Take a look at strata properties and mobile home markets as well.
Months of inventory is the statistic that indicates that if no new listings come on the market and the current demand continues and all else being equal, how long it will take to deplete the supply.
Let me know if there is anything I can do for you!
Mark Coons