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How many houses are out there? (It’s getting weird)

How many houses are out there? (It’s getting weird)

In real estate we measure the health of the market based upon the amount of inventory that is on the market. Inventory is measured by looking at how quickly things are selling and comparing it to the number of houses currently available. For example, if your neighborhood has 6 houses for sale and 12 houses sold last year, then you have 6 months of inventory. 0-3 months of inventory is considered a seller’s market, this is hardly anything available and multiple offers on every listing. We haven’t experienced anything like this in Grand Rapids in recent history. 3-6 months is considered a balanced market where neither seller or buyer has an advantage, supply and demand are keeping pace with each other. Over 6 months is considered a buyer’s market.

So, where are we now? Well, if you’ve been reading my blog at all you know that I like charts. True to form, here’s a chart:

You will notice that condos have been especially volatile. For more information on this see a blog by Tom Vanderwell and Fifth Third Mortgage where he talks about the difficulty in getting a mortgage for condos and why by clicking here.

You will see that inventory levels are down. Does that mean the market is getting better? Maybe a little teeny tiny bit. I think it’s more so because people are finally believing that housing value decrease isn’t something that happened in someone else’s neighborhood, it’s happened to them. So, they’re waiting for the market to rebound (which I believe will take years, lots and lots of years in some areas) or they can’t afford to move so they make it work where they are if they can. In fact, I have had several buyers in the last 6 months that couldn’t find a house to fit their needs and needed to build instead.

Weird!

It’s a crazy market out there right now. Thanks for reading my blog and coming along for the ride!

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