What does housing inventory mean?
Inventory is calculated according to a month’s supply, or the number of months it would take to sell the housing inventory based on the current sales rate. So, this means that if there are 100 homes on the market and 10 sell per month on average, then 100 homes=10 months of inventory. Generally, a 6 month inventory indicates a balanced and healthy market.
Local housing inventory:
In King County, we just fell to 2.4 months of inventory in October; the inventory has been steadily declining since the beginning of 2012, and is 45% lower than this time last year. What does this mean? In short, it means that houses have been selling. Days on the market has also been steadily declining, and houses are selling at around 96% List Price on average. This is good news for the economy, indicating that the market, at least locally, is experiencing a turn-around. In fact, Seattle was just ranked as the fifth-best market in the U.S.
If you are a homeowner: Can you afford NOT to sell your home when inventory is low and demand is high?