The Market is great!

I've said it over and over lately. It is a great market!

Technically speaking, the market is always great. The only thing that changes is for whom the market is great. (Too many uses of 'great?'....sorry)

It all has to do with supply, demand, and months supply. Supply and demand are easy enough. Supply is what we have, and demand is what we want. When we have more than we want, prices go down. When we want more than we have, prices go up. Got it? OK. Months supply is a number that helps us understand whose market it is: buyers or sellers?

The following is a quote from the National Association of REALTORS:

Assessing months supply is an

important consideration when

describing market conditions. It

succinctly measures activity in the

housing market at a given point in

time.

Months supply is determined by

calculating the ratio of inventory

available for sale at the seasonal

sales pace in a given month. If

months supply increases, the

implication is housing demand

favors buyers; if it decreases it

suggests better opportunities for

sellers.

The current national months

supply of housing inventory is 9.4

months, down from 11 months

one year ago. This means that, at

the current rate of sales and

available inventory, it would take

about nine months to sell all the

homes currently available for sale.

However, for homes under

$250,000, months supply is six

months, which indicates greater

demand. In contrast, the market

for $1 million+ homes is virtually

frozen at 21 months.

So what does it all mean? The bottom line is that we have had a buyer's market for quite a while now. If you wanted to buy a house, you had plenty of inventory from which to choose and prices looked pretty good. The trend appears to be shifting now. With the exception of mega-homes, sellers are getting stronger. We can attribute this shift to things like the implementation of tax credits ($8000 for new home buyers) and the reduction in new construction.