Interesting news was released from the National Association of Realtors this week, the amount of time a home is on the market measuring system had to be revised to accommodate the shrinking inventory nationally. The median amount of time a home was on the market for july was down 29.6% from 98 days last year to 69 days this year. Markets across the nation continue to improve and the relationship between inventory and supply is very pertinent to sellers. Chief Economist for NAR, Lawrence Yun made these remarks regarding the recent news, “A notable shortening of time on market began this spring, and this has created a general balance between homebuyers and sellers in much of the country. This equilibrium is supporting sustained price growth, and homes that are correctly priced tend to sell quickly, while those that aren’t often languish on the market.”
Lower inventory means increased prices for sellers. Nationally, there is a 6.4 month supply of homes which is 31% below last year. Due to this restriction in inventory, Yun speculates further increases in prices in 2012 and 2013, “Our current forecast is for the median existing home price to rise 4.5-5% this year and about 5% in 2013, which is somewhat stronger than historic norms because of the inventory shortfall that is most pronounced in the low price ranges. Ironically, if housing construction doesn’t pick up to normal levels within two years, supply shortages could be sustained for an extended period and lead to above average appreciation, therefore any unnecessary hindrance to housing starts, such as excessive local zoning regulations or stringent bank capital rules for construction loans, should be carefully re-examined.” Builder confidence is very high right now, and we have seen this most acutely in the Miami market, which is teeming with new projects and opportunities in areas such as Brickell, Downtown, and in Sunny Isles. For more information on new projects, contact us today!