07 Feb Low Inventory of Homes for Sale, What it Means for You!
The Low Inventory of Homes for Sale, What it Means for You!
The 13 County Metro is considered to have a balanced inventory when we have 21,000-24,000 active properties for sale. The Minneapolis Area Association of Realtors tells us this amount of inventory means homes will sell in about a 5 month time period and it’s neither a Buyer’s Market or a Seller’s Market.
This includes the entire 13 County Metro and all types, styles and price ranges of properties. For some comparison, consider the following details: In 2008 when nothing was selling and it was an extreme Buyer’s Market, the level of active inventory in the 13 County Metro climbed all the way to 48,000+ active listings. Conversely in 2005, when we had multiple offers on everything and it was an extreme Seller’s Market, the level of inventory got down to just below 12,000 active listings.
Today, I ran the search and the number of active properties came back at 10,502. Wow, that’s low. The big question is…Why is it not a total Seller’s Market with Multiple Offers on every single listing? The answer is…..the number of ready, willing and able Buyers is also much lower than it was in 2005.
One are many reasons for the fewer number of buyers including:
- More difficult to qualify for a mortgage
- Need for a downpayment to get a mortgage instead of Zero-Down
- Distrust of Buying a Property because of the recent Real Estate crash
- People who had a foreclosure or short sale need to wait 3 years to qualify for a new mortgage
- Large supply of Properties including townhomes and single family detached homes available for reasonable Rental Rates
- Fear of being laid off in their current job makes buyers hesitate about buying a home
- Previous job loss caused buyers to use their savings towards survival
