You don't have to be an economist to know what supply and demand does to a real estate market. Great buyer demand but low home supply. It is this simple. We have a back-log of buyers and it is growing due to not enough homes for-sale. Today there are approximately 58% less homes for-sale than 2010 and 29% less homes for-sale than 2011. A challenge for buyers however great for sellers!
In my professional opinion, I believe that there is pent-up-demand by buyers who waited as housing conditions improved.Â Demand grew! There is a back-log of buyers so to speak desiring to take advantage of still historically low interest rates but where are the houses for-sale!
Between 2005 and mid-2012, sellers listed too high as they purchased their home at the height of the market in 2005 and could not afford to sell and even if a buyer wanted to purchase the home it would not appraise at the offer price. Buyers and their agents knew the home was priced too high and days on market crept up to many months and the listing was withdrawn for-sale. The only sellers selling were those that had equity and could afford to sell. Then we had foreclosures and short sales due to distressed homeowners who had to sell. In the meantime, seller's home values had decreased and they knew that it did not make sense to put their home up for-sale so inventory continued to drop from 2010 to now.
Inventory is finally soooooooo low that we have reached the point that there are not enough homes for buyers to purchase. Buyers are paying full asking price and above due to demand. Again, the house still needs to appraise so we have to be cautious, but because more houses are selling the appraisers have more comparables to support the purchase price.
In summary, while we have few homes for-sale we are selling more homes than 2010 to mid-2012. There are more homes under contract, days on the market is much less and the good news is that the average and median sold prices are increasing.Â Good news for the housing market!