Housing markets most squeezed by inventory shortages in recent years are seeing listings come off the market in record time.
The recently released Trulia® Inventory and Price Watch identifies an ongoing trend in the housing market: the more inventory declines, the less time homes spend on the market. Supply kept falling in the second quarter of 2017, down 8.9 percent year-over-year, marking a record nine quarters in a row.
According to Trulia, there is a link between the movement of available inventory and the days homes stay on-market, with fewer homes on the market after two months in areas where supply has dropped significantly in the last five years.
Current inventory conditions are also eroding affordability, especially for first-time homebuyers in the market for starter homes, which would require 39.1 percent of their monthly income. Buying a trade-up home, to compare, would require 26 percent of monthly income, and buying a premium home would require 14.3 percent of monthly income.
“Markets that have witnessed larger decreases in inventory have experienced larger declines in the share of homes still sitting on the market after two months,” says Ralph McLaughlin, chief economist at Trulia. “With these declines, falling inventory has also pushed affordability of homes across all segments to new post-recession lows.
“As inventory continues shrink, the few homes that are available are flying off the market within a couple of months,” McLaughlin says. “In the tightest markets in California, only one in four homes are still on the market after two months. Clearly, this spring [did] not bringing the inventory relief buyers so desperately need. In today’s frenzied market, buyers must be prepared to 1), move fast, 2) be flexible with sellers’ timelines, and 3) make multiple offers.”
For more information, please visit www.trulia.com.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at firstname.lastname@example.org.
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