If you’ve been following this column you probably weren’t surprised by the headline in today’s Wall Street Journal: “Home Prices Climb As Supplies Dwindle”. We’ve been saying for some time that the number of current listings, i.e., supply, is one of 4 key real estate indicators. When the supply of something goes down, prices tend to go up.
Other than in Rumson, the number of active listings of single-family homes (homes available for sale) has decreased, and sometimes decreased dramatically:
Change in the Number of Active Listings of Single-Family Homes
July 31, 2012 vs. 2011
Note: the above table is for single-family homes only (not including condominiums).
What does this mean for Red Bank and Shrewsbury home buyers and sellers? For buyers it means the probable end of the chance to buy a house both at a low price and at mortgage rates that are at or near historic lows. For sellers it means less risk of selling their homes for unreasonably low prices.
The Wall Street Journal article says that in some parts of the country brokers are reporting multiple offers on newly-listed homes, and even bidding wars on homes that are attractively priced. Of course there are still concerns about the “shadow inventory” of bank-owned repossessed homes coming back on the market and bringing up the number of active listings. In addition, it’s still much harder to get a mortgage than it was 4 or 5 years ago. However, these two factors haven’t spoiled the housing recovery in hard-hit areas like Florida, Las Vegas, Phoenix, etc.
If you’re thinking of buying or selling a home, I hope this real estate update was useful to you.