As home price appreciation slows down and inventory begins to increase, the market may be entering a buyer’s market.
In 21 out of the 50 largest cities in the United States, there have been increases in the number of homes for sale recently compared with a year ago. If supply is becoming more available what does this mean for buyers?
Inventory ticks up for higher-priced homes:
December of 2017 marked the point in the last 25 years when inventory of homes had been the lowest.
In that month, inventory turnover was 1.66% (occupied homes in the United States divided by homes for sale nationwide) So for every 10,000 homes that could be occupied 166 were for sale. The average historically is 250 per 10,000.
That, of course, is still low, but it may indicate a change in direction for the market.
Right now, the increase in inventory only seems to be among higher priced homes (those priced over $350,000) nationwide. Leading the way in this national trend are the most expensive cities.
What does this mean?
It may or may not mean that we are entering a buyer’s market. If the supply of homes available increases and the demand remains constant, then the buyers have more options and prices will come down. It is too early to tell if we are in a buyer’s market or not. Keep an eye on supply and demand and also days on market of properties.