• 115 Active Residential Properties
• 259 Contingent Residential Properties
• 5.0 Months Inventory = Balancing Market
• Typically the 1st quarter is one of our slimmest for closings reflecting the slowdown in contracts during the winter months
• The decrease in volume coupled with the drastic decrease in marketing time reflects our market is still tight
• In my opinion the inventory numbers are a bit skewed
Last month I started getting curious as to how this atypical market compares to what we are historically used to seeing in our area, so I did some comparing to 2017. March marks the start of the spring rush and therefore we start seeing an influx of homes being put on the market, so I was curious how far behind in new listings we were as compared to 2017. I was a bit surprised to see that in both categories we were only about 10% behind 2017 in listing volume last month. I’m hoping this is an indicator we are continuing the curve to a balanced market, but it will take quite a while to get there.
On this topic, I noted in my takeaways that I believe the inventory numbers are skewed. When we calculate the “absorption rate” to determine what kind of market we’re in, properties currently under contract of sale but not yet closed are always included. Normally, that makes a lot of sense. After all, a house hasn’t sold until it has sold so it’s logical and fair to include them. That being said, it is not normal to have such a disproportionate number of properties under contract as opposed to active. Typically there are more active properties than those under contract, and almost to the point of the reverse of what we’re seeing. As an illustration of that, if I account for only active properties in that calculation that drops our inventory to 1.4 months. That’s an extreme difference, to say the least.
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