Friday, March 24, 2023

Market lacks sellers so buyers still compete for homes

Last month in SW Washington which for the local MLS is all of Clark, Skamania, and the Woodland area in Cowlitz. Closed sales were again light in volume and the bulk of the activity remains at the entry level. Median is holding firm around $500,000 just nudging up a tad this year so far. 

Inventory is the real story. We are very tight and some people feel like everything is slowing down and it kind of did since there was a point a little over a year ago were inventory was measured in DAYS, rather than months. But a neutral market is generally considered to be 5-6 months of inventory so 1.9 is still a hot seller's market.

The inventory has been ever so slowly creeping up but at the pace we have seen 5 months of Inventory would take two years. The spring selling season is knocking at the door. How the activity pans out in April and May as far as new listings will play a pivotal role in determining whether we remain locked in a tight market or whether buyers start to gain a little leverage.

I have said several times over the last year or so, this is not a tight market because we have a lot of buyers, it is a supply side problem of low inventory. Think of it this way if 100,000 buyers are competing for 300,000 properties that's a lot of buyers and ultimately a lot of transactions but buyers would have the upper hand. But if 100 buyers are competing for 10 properties... you get the drift right. There wouldn't be a lot of sales but the sellers would rule the roost.

I hear a lot of agents complain how "slow" the market is but in reality there are just too many agent vying for too few listings. From he buyers perspective it feels like a huge mass of competing buyers are snatching up all the houses and outbidding them. But it is really just an average number of buyers competing for a very low number of available properties.

Keep you eyes open as we stroll into springtime, perhaps sellers are ready to list and make that up move or downsize.



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