04/27/2020
A big challenge facing the housing industry is determining what impact the current pandemic may have on home values. Some buyers are hoping for major price reductions because the health crisis is straining the economy.
The price of any item, however, is determined by supply and demand, which is how many items are available in relationship to how many consumers want to buy that item.
In residential real estate, the measurement used to decipher that ratio is called months supply of inventory. A normal market would have 6-7 months of inventory. Anything over seven months would be considered a buyers’ market, with downward pressure on prices. Anything under six months would indicate a sellers’ market, which would put upward pressure on prices.
Today, we are very much in a sellers’ market with 3.4 months supply of inventory. According to experts, when supply is this low, home prices are very unlikely to depreciate. Even though the economy has been placed on pause, it appears home prices will remain steady throughout the pandemic. DM to talk about how this reflects in our local market and how it positions you in your real estate goals.
