Affordable homes still the hottest market.
Local housing inventory and affordability have been main topics of conversation in the real estate industry for much of this year. At the end of December, overall inventory was up 21% year-over-year. While available inventory is up slightly even in the under $300,000 price range, there were just 10 more listings available in December 2016 in this most affordable range. The most notable year over year inventory change occurred between $300,001 - $600,000 where we see a 40% increase in availability. Much of this increased inventory is due to the appreciation in home values during the year.
When we look at absorption by price range, we still see a strong seller’s market in homes priced below $600,000. For homes priced below $300,000 there is currently one month of inventory emphasizing the need for more affordable homes in our market. For homes in the range of $300,001-$600,000, available inventory is just over 2 months. It is good to remember that The National Association of REALTORS considers 5 to 6 months of inventory a healthy market, where neither buyers nor sellers have a distinct advantage.
In the price ranges above $600,000 we have a greater inventory of available homes, and a shift toward more of a buyer’s market. The months of inventory sits at 6 months for properties in the $600,001 to $900,000 range. In the next price range from $900,001 to $1,500,000, it sits at is 9.6 months. For homes priced over $1,500,000, we have seen a dramatic increase in inventory since the beginning of the year; currently with over a 4 YEAR supply.
As we arrive at the end of the calendar year, it’s a good time to look at the Percentage of Sales by price range. Over 94% percent of all sales since the beginning of 2016 have been under $600,000, with 55.3% of sales occurring below $300,000. Thirty-nine percent of sales occurred between $300,000 and $600,000. Only 3.9% of sales this year have been between $600 and $900,000. The remaining 1.8% of sales were over $900,000.
The supply-demand equation continues to drive home prices up in the most affordable price ranges below $600,000. However, the pace of price increases is beginning to temper, and often depends on the neighborhood or area of town. Whether you are considering a move to downsize or to move up, now is a great time for us to speak to discuss your options.
At Dickson Realty, we have the tools, training and award-winning technology to stay on top of the market. That will help you buy or sell at the right price.