Spring housing inventory points to strong market

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With increasing signs that the brutal winter weather disguised the fact that the economy is actually strengthening quite strongly, buyers hoping that the spring selling season would see an increase in inventory are, so far, being disappointed.

Yes, there are more properties coming onto the market each week, but the inventory, at under 4 months’ supply in Essex County for both Single Family Homes(SFHs) and condos, reflects a sellers’ market as 6 months of supply is generally regarded as representing a market in equilibrium.

The following tables show the months of supply for each town, Essex County and Massachusetts, for both SFHs and condos; and the inventory by price in Essex County.

Source: MLS, Oliver Reports

Source: MLS, Oliver Reports

While the actual number of SFHs for sale has increased slightly, the supply in terms of months has not because sales have increased over the last year.

Source: MLS, Oliver Reports

Source: MLS, Oliver Reports

As the prices of SFHs at the lower end have increased buyers have turned their attentions to condos, where supply is down sharply from last year.

Now for Essex County by price:

Source: MS, Oliver Reports

Source: MS, Oliver Reports

It seems quite likely that the increased inventory in the $350-499,999 and $750-999,999 price ranges reflects upward pressure on prices. While the percentage increases at the top end are quite large, the actual numbers are not, and we have seen a sharp increase in sales over $1 million this year, from 27 to 48 (with another 40 pending) in Essex County.

And condos:

Source: MLS, Oliver Reports

Source: MLS, Oliver Reports

As a believer in the laws of supply and demand I see nothing here to suggest other than that the housing market in Essex County will continue to strengthen this year.

If you  – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.

Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty

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