The real estate market is in the
midst of a major comeback. Sales are greater than any time since 2007. Consumer
confidence is increasing. Economists are now saying housing is the major
tailwind to our nation’s overall economic recovery.
However, there is one major
challenge that could stall the housing market: a lack of inventory.
According to the National Association of Realtors
(NAR) latest Existing Home Sales Report:
“Total housing inventory at the
end of December fell 8.5 percent to 1.82 million existing homes available for
sale, which represents a 4.4-month supply at the current sales pace,
down from 4.8 months in November, and is the lowest housing supply since May
of 2005 when it was 4.3 months, which was near the peak of the housing
boom.
Listed inventory is 21.6 percent
below a year ago when there was a 6.4-month supply. Raw unsold inventory is
at the lowest level since January 2001 when there were 1.78 million homes
on the market.”
A recent survey by Redfin reveals that the challenge seems
to be continuing into 2013. New listings taken in the first 14 days of the year
decreased by 30% as compared to the first two weeks of 2012.
A lack of supply will be good
news for prices in the short term. However, for a long term recovery in
housing, an increase in current inventory is crucial.
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