Why DC's Housing Inventory Growth Will Turn Negative in 2016

  • February 12th 2016

by UrbanTurf Staff

Why DC's Housing Inventory Growth Will Turn Negative in 2016: Figure 1

It is not what homebuyers in the region want to hear, but real estate watchers in the DC area believe that the growth of housing inventory in the region will turn negative at some point in 2016.

The prediction is largely based on the cyclical nature of the market, Elliott Eisenberg of RealEstate Business Intelligence explains, and the market is reaching a point where inventory has virtually stopped increasing.

“Inventories declined steadily from March 2011 through September 2013,” Eisenberg told UrbanTurf. “Then in October 2013, inventories reversed course and began to increase. At first the year-over-year increases were small, but then they got bigger and bigger until peaking in August 2014 with a year-over-year rise of 34.6 percent. Since then they have been steadily declining for almost every single month since October 2014, a period of almost 1.5 years.”

Eisenberg says that due to these historical cycles and sustained buyer demand, he believes inventory growth will turn negative again in the coming months.

“I do not know if it will be in April or May or June, but I bet it will happen by mid-year,” Eisenberg said, anticipating that the cycle of negative inventory could last for 18 months.

So, what will that mean for the regional housing market? More of the same, essentially, specifically homes spending less time on the market and prices increasing based on low supply and high demand.

This article originally published at https://dc.urbanturf.com/articles/blog/why_dcs_housing_inventory_growth_will_turn_negative_in_2016/10869.

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