If you have been on the hunt for a home recently and feel like there is less to choose from, you’d be right.
The inventory of homes for sale in the DC area in July reached its lowest point since August 2005, RealEstate Business Intelligence (RBI) reported this morning. The report stated that there were 9,650 active listings on the market at the end of last month, a 35.4 percent drop compared to a year ago. In addition to the low inventory, only 4,579 new homes were listed for sale in July, the lowest amount for that month “on record with metro-wide data available back to 1997.”
From the RBI report:
The shrinking inventory of homes for sale is having an impact on the market as evidenced by the lowest July-level median days-on-market since 2005 (23 days), and the highest July-level sale- to-list-price ratio since 2006 (96.3 percent). The low supply also indicates that many potential sellers may still be wary of their financial situations, and are more comfortable remaining in their current homes.
Jonathan Miller of real estate appraisers and consultants Miller Samuel points to low to negative equity as a possible reason for the low inventory.
“If you don’t have enough equity to trade up, then you simply don’t sell. This is happening across the US right now,” Miller told UrbanTurf. “In a strangely artificial end around, it may be how the housing market finally recovers. Goose prices up a bit, bringing up equity levels allowing them to refinance and sell over the next few years.”
In addition to low inventory, the report also noted the continued strength of the condo market, which posted year-over-year median price gains of 4.4 percent and a 12.7 percent increase in sales over July 2011. RBI pointed to escalating rents, easier financing and comparatively lower price for reasons as to the health of this market segment.