We’ve been talking a lot about our region’s low inventory of homes for sale here on Mercer Island Pulse (Should I Wait to Move Up; Continuing Discussion: Our Local Housing Market and Low Inventory; Sellers – Why Waiting To Sell May Not Make Sense). February 2013’s regional statistics exhibited another month of incredibly low inventory. February 2013’s Months of Inventory for Mercer Island was 2.8 months for closed sales. The Months of Inventory for pended sales on Mercer Island (where homes were in the process of being purchased but had not closed yet) was even lower at 1.9 months. This situation has caused the island real estate market to become more of a seller’s market, where there are more buyers for well priced homes than listings available.
Do you have questions about what the term “months of inventory” means? The infographic below explains “months of inventory,” along with sharing other pertinent information about the Mercer Island real estate market and low inventory.
In the infographic, the term “balanced market” is mentioned. A balanced market is a situation where the market is neutralized – there are equal numbers of buyers and sellers in the marketplace. Home pricing is generally more stable as the months of inventory are higher to accommodate the number of buyers, however not so high as to cause homes to languish on the market because there are not enough buyers for the homes listed for sale.
How many months of inventory are needed to create a balanced market? This number is subjective, as it is dependent on a number of market factors like average home pricing and average number of homes listed for sale to create neutrality in the market. On Mercer Island, 5 to 9 months of inventory, as mentioned in the infograpic, is typically a balanced market. In other areas you may find that a balanced market has a little lower months of inventory count, like 3 to 6 months or 4 to 6 months.
Do you have any questions about the current real estate market on Mercer Island? Please post them in the comment section below. Also, if you would like more statistics about the real estate markets in Mercer Island, Seattle and the Eastside, check out the blog Weekly Property Report — this blog provides weekly 16-week summaries of market activity, by price point, for fifteen MLS areas in the greater Seattle/Eastside region.