Existing-Home Sales Report Indicates Now Is a Great Time to Sell

Existing-Home Sales Report Indicates Now Is a Great Time to Sell | MyKCM

The best time to sell anything is when demand for that item is high and the supply of that item is limited. The latestĀ Existing-Home Sales ReportĀ released by theĀ National Association of RealtorsĀ (NAR),Ā reveals that demand for housing continues to be strong, but the supply is struggling to keep pace. With this trend likely continuing throughout 2020, now is a great time to sell your house.

THE EXISTING-HOME SALES REPORT

The most important data revealed inĀ this reportĀ was not actually sales. In reality, it was theĀ inventoryĀ of homes for sale (supply). The report explained:

  • Total housing inventoryĀ at the end of AugustĀ decreased 2.6% to 1.86 millionĀ homes available for sale.
  • Unsold inventory is lower than the 4.3-month figure recorded in August 2018.
  • This represents aĀ 4.1-month supplyĀ at the current sales pace.

According to Lawrence Yun,Ā Chief EconomistĀ atĀ NAR,

ā€œSales are up, but inventory numbers remain low and are thereby pushing up
home prices.ā€

In real estate, there is a simple guideline that often applies here. Essentially, when there is less than a 6-month supply of inventory available, we are in a sellerā€™s market and we will see greater appreciation. Between a 6 to 7-month supply is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyerā€™s market and can expect depreciation in home values (see below):Existing-Home Sales Report Indicates Now Is a Great Time to Sell | MyKCMAs we mentioned before, there is currently aĀ 4.1-month supplyĀ of homes on the market, and houses are going under contract fast.Ā The Existing Home Sales ReportĀ also shows thatĀ 49% of properties were on the market forĀ less than a monthĀ when they were sold. In August, properties sold nationally were typicallyĀ on the market for 31 days.Ā As Yun notes, this should continue,

ā€œAs expected, buyers are finding it hard to resist the current ratesā€¦The desire to take advantage of these promising conditions is leading more buyers to the market.ā€Ā 

Takeaway:Ā Inventory of homes for sale is still well below the 6-month supply needed for a normal market, and supply willĀ fail to catch up with demandĀ if aĀ sizable supply does not enter the market.

Bottom Line

If you are going to sell, now may be the time to take advantage of the ready, willing, and able buyers who are out there searching for your house to become their dream home.