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Lower inventory, what does that mean exactly?

I will try to answer that question pertaining to residential homes in this blog. Lower inventory equals current number of homes for sale compared to an inventory date in the past. For this session, we will use December 2011 compared to this year and more specific August 2012.

Generally starting in late spring our inventory will start to increase and grow to it's highest level by July. Interestingly enough, we had a dramatic drop in inventory (650 homes) at the beginning of 2012 to about 1300 homes on the market. During the year we increased to 1480 and have been dropping since. We currently have an inventory of 1398 homes for sale in our board.

What this means to a buyer is significant. If you as a buyer have a specific range of needs, location and maximum price you may feel like there is not much to look at. I know that sounds silly but it is a fact. I have been helping several buyers lately that are feeling frustrated with what they have to chose from.

Here are some examples;

Buyer looking in $60,000 - $85,000, we found 8 homes to look at. Many in bad shape.

Buyer looking in $90,000 - $130,000 range with a 4th bedroom or extra family room that does not need much work. We did not find any.

Buyer looking in $150,000 - $200,000 with a large yard or acreage. We found 5 and these homes not meeting many of their other needs. Remodel time!

Buyer looking in $250,000 - $350,000 lakefront home less than 30 minutes from Branson that you can see the water. We have 5 to look at.

What happened to the stories of people having 30 or 40 homes to look at? Those days are gone.

I have folks coming to town in a couple of weeks and 4 of the 7 homes they liked are under contract before they could get here to see them.

When you are looking in a smaller inventory your search criteria list is going to be reduced or you are going to have to be patient. If you need a home soon you are going to have to be ready to write the offer and it may be full price. Ouch!

A lower inventory is generally good for everyone and we do not want to go back to 2010 and 2011 with bigger inventories. The super deals may be gone but you can still buy a home equal in price to 2001 levels.

Make sure you vote in November.

Until next time,

Rob