Steve's Market Forecast - Fall 2007

It´s not very often that we have a Buyers´ Market in Western North Carolina. But we do now! Or, do we? I guess it depends on what you´re looking for. 

 

Let me explain. We currently have 9 months of inventory on the market. What does that mean?   Said another way, if we had no more homes being added to the market, we would be out of homes to sell in 9 months. Well, if you have 6 months of inventory it´s even between a sellers´ market and buyers´ market. More then 6 months of inventory indicates a Buyers´ market. So, at first glance it would seem that we clearly have a Buyers´ market. However, on closer examination there are different levels of inventory for different price points of homes.   For example, homes under 250K have less then 4.5 months of inventory and homes over a million have roughly 18 months of inventory. 

 

What has the trend been? The inventory has been trending higher and it´s a bit hard to call. In talking with many of the veteran agents, in the area they say our area is the last to soften, (which was true this time around) and the first to rebound. I believe that will be the case this time.  

 

How is this affecting prices? Some areas are having prices pushed down a bit. 

 

You would think that all the excess inventory is due to the buyers not buying. That´s what is really interesting! The number of transactions as compared to last year is down, but only about 5%. So where is all the extra inventory coming from? One major source of homes on the market is new construction. Also, some folks are putting their second homes on the market because they can´t sell their primary residence in places like Florida or elsewhere. We often hear "We want to buy in your area, however, we just need to sell our home back home."

 

FLORIDA MARKET AFFECT ? Florida continues to have major problems with excess inventory. However, there may be light at the end of the tunnel. Investors are starting to buy in Florida. So, as soon as their market turns we will turn as well and then run for years. 

 

Here is why: The new Land Use Code, that is now law, will eventually lead to higher prices, because our zoning is much more restrictive now.       

 

We are moving into fall now. It would be nice if interest rates were to push down a bit.