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

• November 13th 2009

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.

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.