One of the most common statistics used to determine the health of the real estate market is Months of Inventory. This number is found by taking the number of homes that are currently listed and dividing by the average number of sales per month to show how long the current pool of homes for sale would last if no additional homes came on the market. For example, if there are 100 homes listed and an average of 10 homes per month are sold, 100 homes/10 sold per month = 10 months of inventory. Pretty simple, right? Well, not really...
Currently in Vancouver WA, there are 2027 homes listed as "active" the RMLS. In the last 3 months there have been 964 sales, so an average of 321 sales per month. 2027 / 321 = 6.3 months of inventory. In reality, though, not all 2027 homes are actually available. Of the homes currently marked as "active" in the RMLS, 248 are short sales that have at least one, if not multiple offers, already submitted to the bank for approval. That's over 10% of all active listings! Another 259 homes are new construction listings that are either "proposed," meaning the builder intends to build that house at some point, or "under construction," which means the house is not move-in ready. Some of these might be ready within a couple weeks, but others might be several months from completion.
If you take out the short sales with offers submitted and the proposed/new constrution homes, the actual amount of standing inventory is only 1,520. At the current pace of sales, based on the last three months, that means there is only 4.7 months of inventory, not 6.3!
In statistical terms, when there is more than 6 months of inventory is considered a "buyer's market." If inventory is below 4 months it is a "seller's market." Stabilization of inventory will lead to a stabilization of housing prices, the first step towards recover in the real estate market.
If you are considering taking advantage of the low interest rates to make a home purchase, now is a great time! To start your home search and receive daily updates with new listings, e-mail johnblom@hasson.com or give me a call at (360) 977-8329.
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