March is normally a month in which people list their resale homes anticipating strong Spring demand. But this March was unusual with an 86% increase in resale inventory!
Many homeowners may feel that property values are at their peak, especially with the uncertainty provided by the Coronavirus, and they may not want to see their properties decrease in value and the net equities diminish. Whatever their reasons, the sudden increase in resale listings is a welcome surprise to a real estate market starved for inventory.
That said, we still have only 45 days of inventory available, 30 days immediately ready for occupancy.
What happens to upward pressure on prices? It's too early to tell but, even with the recent upsurge in listings, there remain precious few properties for buyers to choose from. The best indicator of future pricing may be the fall off in the number of pending contracts compared to the number of available housing units. As of the end of March this year, there were 599 pending contracts compared to 754 at the end of last March, a drop of 26%.
A good statistic to watch as the market develops is the ratio of pending units to inventory units. Last March we had 1615 pending units to 1475 of inventory units, or a factor of 109.5%. At the end of this March it was 1518 pending units to 1480 inventory, units or a factor of 102.6%, lower but not drastically lower. Let's watch how this statistic develops by the end of April and beyond.
Contact your Group One Sotheby's International Realtor to find out how your neighborhood measures in this important statistic.
The chart below shows the sudden jump in resale listing activity.