Where have all the sellers gone?
Buyers are out there, but sales are being held back because of a shortage of supply. If you are thinking of selling you don’t have to wait until the traditional spring market.
Conventional wisdom is that a market is in balance when the inventory represents about 6 months of sales.Currently, for the North Shore as a whole, supply is just 3.2 months for SFHs and 3.7 months for condos. What does this mean?
Let’s look at the numbers.To account for seasonality I have used L3M (Last 3 Months) of sales, November to January,and compared current inventory to those sales.
First SFHs:
With just 3.2 months of supply, the current inventory would have to almost double to reach equilibrium. Now, of course, at this time of year weather plays a large part. In the last week or so we have, naturally, had days of 61 degrees and days in the low double digits. But right now, buyers are out looking “with intent”.
In Marblehead, sales activity slowed late in the year, thanks to the election and fiscal cliff saga. Thus our supply, at 4.8 months, while still low, is above the North Shore average, but the actual number of houses available is quite low even for this time of year.
Elsewhere, note that Danvers has just 1.4 months of supply and Peabody 1.8 months, while Beverly, Lynn, Lynnfield and Salem are all showing less than 3 months of supply.
In condos, the story is similar if not quite so extreme. Hamilton’s number is meaningless,but Peabody and Salem (again) have less than 3 months of supply.
Here’s a recent article by Nick Timiraos of the Wall Street Journal suggesting reasons, nationally, for the shortage of inventory: Inventory keeps declining
In Marblehead, I suspect points 3 and 4 are most pertinent.
You may recall that not so very long ago the “experts” were saying there would be no recovery in prices because of all the so-called shadow inventory waiting to come on. Now throughout the country real estate agents are out scouring for listings. Sentiment can be fickle, but there can be no doubt that there has been a sea change in recent months.
As I have said before, if there is a surprise in 2013 it is likely to be on the upside.With the stock market very close to an all time high, real estate is the major asset class still to recover.
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Essex is not in this outline. Has there been no activity at all in the last 3 months in Essex?
Cynthia – Essex is not in the list of cities and towns on the North Shore that I monitor regularly.
But as you ask… in the three months December to January (the same time frame that I used for the other towns) 9 SFHs sold in Essex.There are currently 5 under agreement and 21 active listings, of which one has an accepted offer, so there are 20 available. This represents 6.7 months of supply.
There really isn’t a condo market in Essex: just 1 sold in 2012 and there are none listed for sale currently.
Thank you for the details. I look forward to reading all your updates.
You are welcome. Please feel free to ask any specific questions you may have.
Excellent information. I agree – it is an excellent time to list. We listed 2 homes in the past 2 weeks and have had great traffic at open houses and numerous showings.