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Shrinking Inventory and Rising Prices Could Mean the Return of a Seller’s Market

by Mark Wellborn

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Two news items we saw recently made us think that the housing market pendulum could be swinging back in favor of sellers by next year.

The first was from Elizabeth Razzi’s Local Address blog. In the latest installment, she talks with the co-founder of Sawbuck.com Guy Wolcott about the shrinking inventory of homes in the DC area. Here are a few notable statistics: Fairfax County has a 2.7 month supply of homes, Montgomery County has a 3.8 month supply and DC proper a 5.1 month supply. Overall, the Metro area has a 4.5 month supply, well below the six-month threshold that indicates a balanced market.

The second item was a report from the National Association of Realtor’s annual conference in San Diego via The New York Times. NAR chief economist Lawrence Yun gave his forecast for the housing market, which included the somewhat bold prediction that home prices across the country will rise four percent next year. He also noted that he expects home resales will hit 5.7 million next year, up from a projected 5 million in 2009.

Depleted housing inventory and rising prices is usually good news for prospective home sellers. Combine those trends with the expanded first-time tax credit, and we don’t imagine buying will slow anytime soon.

See other articles related to: dclofts, dc area market trends

This article originally published at https://dc.urbanturf.com/articles/blog/shrinking_inventory_and_rising_prices_could_mean_the_return_of_a_sellers_ma/1516

6 Comments

  1. Chacon said at 4:03 pm on Saturday November 14, 2009:

    This is just all speculation. No one knew back in 2006 that last year and this year would be a buyers market. There is expectation that housing sells will go up because of the $8000 tax credit. First, the government made a limit up to 75K for individual and so many people under that income cap took advantage of it however, individual who make over 75K decided to save their money. Now, the government extended the tax credit up to 125K for individuals and individuals like me who make over 75K will be a new home buyers before April or June.  After June, every thing will slow down unless the unemployment drops precipitously. It seems to me that this a scare tactic that was fabricated by the Associate Realtor’s. The wall street, the banks, Associate Realtor’s are a bunch of legit mafia who come up with some fictitious data and tell us that next year will be a sellers market. How about this, it will a buyers market for the next few years.

  1. pqresident said at 1:37 am on Sunday November 15, 2009:

    you’re relying on the NAR’s chief economist for housing data projections? wishful thinking.

  1. HomeEconomics said at 2:22 am on Sunday November 15, 2009:

    Quoting Lawrence Yun about the future direction of the housing market….. come on….. really?

    That guy is the epitome of what got us into this mess to begin with. If you listened to him, then you bought in 2005, 2006, and 2007 because “housing always goes up”.

    DC inventory should remain around equilibrium which will support prices, but the foreclosure train is just leaving the station and DC will not be immune based on the unemployment numbers at the low end of the market. A spike in low-end and distressed inventory would clearly have a negative impact on prices.

  1. Brandon Green said at 6:30 pm on Sunday November 15, 2009:

    I hope you’re right!

  1. Steven said at 10:13 am on Monday November 16, 2009:

    This is about right. Try and find a home on the market in DC these days that is attractive and lasts on the market for more than 24 hours…

  1. Emil said at 4:23 pm on Monday November 16, 2009:

    DC is definitely an anomaly with a lot of all cash transactions. I don’t think supply means much because houses above 1 million stay on the market for months. Meanwhile, rowhomes and condos between 200-350k sell within days… or hours.

Comments are closed.

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