A Tale of Two Housing Markets
An article from six months ago stated that a mismatch between the type of homes for sale and the demand of buyers in the US was causing the formation of two markets. In Jamaica Plain, 269 homes sold in the past 6 months and our local numbers are matching national trends. Let's look at what that means.
The Local Market
Homes in Jamaica Plain below $1M sold in relatively quick time and saw an increase between list and sale price. This means that the buyers were abundant, they were ready to give competitive offers, and sellers were still calling the shots. However, if you look at the average days on market for homes above $1M, it tells a different story. The price on average went above asking, but it took almost three times longer to accept an offer. Buyers are driving the market for premium homes in Jamaica Plain.
|Sale Price||Number Sold||Average Days on Market||Average List to Sale Difference|
|$500K - $1M||134||20.60||5%|
The National Market
In the starter and trade-up home categories, there were significantly more buyers than there were homes for sale, causing a seller’s market. In the premium, or luxury, home categories, the opposite was true as there was a surplus of these homes compared to the buyers that were out searching for their dream homes, which created a buyer’s market.
According to the National Association of Realtors latest Existing Home Sales Report, the inventory of existing homes for sale in today’s market is at a 4.2-month supply. Inventory is now 6.5% lower than this time last year, marking the 27th consecutive month of year-over-year decreases.
Looking at the latest report from Trulia, we can see that not much has changed, and in fact, recent natural disasters across the country have made inventory conditions even direr.
Trulia’s market mismatch score measures the search interest of buyers against the category of homes that are available on the market. For example: “if 60% of buyers are searching for starter homes but only 40% of listings are starter homes, [the] market mismatch score for starter homes would be 20.”
The results of their latest analysis are detailed in the chart below.
Nationally, buyers are searching for starter and trade-up homes and are coming up short with the listings available, which is leading to a highly competitive seller’s market in these categories.
Premium homebuyers, on the other hand, have the best chance of less competition and more inventory of listings in their price range with a 14.7-point surplus, which is creating more of a buyer’s market.
If you are thinking about buying OR selling this fall, let’s get together to discuss the exact market conditions in your area.
Parts of this article originally appeared in Simplifying the Market.