Seeing the chart above from realtor.com was an aha moment for me. It clearly shows that a shortage of new listings isn’t the biggest reason for low inventory nationwide. The biggest problem is that homes are selling so fast that new listings can’t keep up!
New listings are indicated in blue in the chart above and you can see that although they dropped 9.1% in January year-over-year what is more significant is the huge drop in carry-over listings… down 61%!!
Carry-over listings are those active listings carried over from the previous month because they didn’t sell yet. Listings are now sold so quickly, they don’t stay on the market long enough to carry over month-to-month (shown in green in the graph).
In other words, buyers are so eager to buy that homes are not staying on the market for months as they had prior to the pandemic. Homebuyers will tell you from experience that homes now often sell in a matter of days!
In the report referenced above, NAR reveals that:
“Seventy-nine percent of homes sold in January 2022 were on the market for less than a month.”
Looking at annual new listings vs closed sales in the Twin Cities market clarifies it even further.
New listings have remained fairly constant in recent years while closed sales have increased, depleting the supply of homes for sale more and more each year. Bottom line is buyer demand is higher than ever and we need new listings more than ever to try keep up! At this rate it will take many years to build inventory back up to a balanced level of 5-6 months supply, there is now less than a one-month supply.
If the start of 2022 is any indication, we are off to another year with insane market competition where buyers must make quick decisions on one of the biggest and most emotional purchases you will make. Case in point… I had an appointment to show a property tomorrow, the first day it changed from coming soon to active status. I got a notice this afternoon that our showing was cancelled…
“Property is under contract – Sellers received a strong sight unseen offer and the property went straight to pending.”
Real estate transactions are complicated. Much like putting together a puzzle, an excellent real estate agent is skilled at pulling all the pieces together and explaining it. That requires attention to detail and the heart of a teacher.
Your process will go much smoother if you choose a knowledgeable Realtor you can trust and relate to on both financial and emotional levels… which is a little different for everyone. But how do you find such a Realtor?
Tips for choosing a Realtor… finding someone you can trust
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
RELATED POSTS