Demand is up and supply of homes is down

The one thing that I think that could be standing in our way—and this is going to sound funny to some 

of you—is the biggest challenge in most parts of the country is inventory. This chart  shows you the month’s inventory of homes for sale from the NAR existing homesales report. A normal market 

is that yellow line going across. That is five to six months. 

The reason we have had challenges over the last two years as you can see that the inventory was well 

above normal levels. That said that we are in a buyer’s market. There is too much inventory for sale 

compared to the amount of demand there was for that inventory. 

And pricing is all about supply and demand. Supply was way up and demand wasn’t.

 

Well demand is starting to increase. Just take a look at this slide.  And at the same time, inventory is decreasing below normal levels in many parts of the country.  As a nation overall, what does that mean?  Well if demand is up and suppl is down, prices are going to go up and that is exactly what has taken place.  We will address that issue going forward.

I would appreciate any comments on this post.