By Peter Ricci
The National Association of Realtors is reporting that the median listing time of properties for sale in July was 69 days, a 29.6 percent decline from the 98 days in July 2011.
The data represented a wide spectrum of the for-sale market, with one-third of the homes listed being on the market for less than a month and one in five being listed for at least six months.
Housing Inventory Impacting Median Listing Time
- According to the latest numbers from NAR, there was a 6.4-month supply of homes at the end of July, a 31.2 percent decline from the 9.3-month supply in July 2011; competing stats from the Dept of Numbers puts the inventory decline at 23 percent.
- Lower housing inventory has also created a positive relationship between buyers and sellers; in the years following the housing collapse, real estate was stuck in what seemed an eternal buyers’ market, but now that inventory is within healthy limits (a six-month supply is considered normal), the market is now in a “general balance between home buyers and sellers,” in the words of Lawrence Yun, NAR’s chief economist.
- There is also historical data supporting NAR’s findings. When existing-home inventory hovers around a six-month supply, the median selling time for properties is just over six weeks, and with the market being balanced between buyers and sellers, home prices increase 1 to 2 percentage points above inflation.
Is the Housing Market Becoming Normal Again?
Interestingly, those findings are also consistent with the greater historical trend of NAR’s influential Profile of Home Buyers and Sellers – from 1987 to 2011, the typical listing time for properties was 6.9 weeks, and the average supply in that time was 7.0 months. If housing inventory stays low, though, Yun said the affects on price could be quite positive.
“Ironically, if housing construction doesn’t pick up to normal levels within two years, supply shortages could be sustained for an extended period and lead to above average appreciation,” Yun said.
Give us your thoughts on this development; do you see this as a promising sign that the housing market is balancing out, or are we just in a temporary blip of normalcy?