Snap Shot Summary, early June

Beginning the 2nd week of June, across our vast valley,  there 25462 active residential listings in our MLS (Multiple Listing Service), and this includes homes of all types, sizes, prices and  from condos to single family detached.  Sounds like a lot of houses, doesn’t it?  And, since  some experts say inventory of 26,000 to 30,000 equates to a balanced market, it seems 25k would be good number of choices from which to choose.  The choices vary according to the price range you are shopping, however.  Considering that within the last 4 weeks there were 3956 home sales/closings for properties $200k and under, 9300 listings in this price range is pretty tight.  Here’s an approximate break down by broad strata as of June 8:

• 9351 priced $200,000 and lower
• 10343 priced $201,000 to $500,000
• 3066 priced $500,001 to $1,000,000
• 1023 priced $1,000,001 to $2,000,000
• 555 homes priced $2,000,001 and above

According to Michael Orr’s Cromford Report (June 2nd), we have lower demand and also supply is weakening.   The reasons for weaker buyer demand are several.  One biggie is the huge investor purchasing activity seen for several years has tapered off.  Also (from The Cromford Report, June 2, 2014):

• “low participation by first time home buyers
• the inhibiting effects of massive student loan debt
• millennials preference for the flexibility of renting
• the foreclosure wave in 2008 through 2012 which has introduced a new sensitivity to the fact that home ownership can sometimes be financially hazardous
• a large tranche of former home owners who have not yet repaired their credit enough to re-enter the market
• low rates of household formation, especially among 20-30 year-olds
• a growing wealth gap causing stronger demand for high end homes but leaving large numbers of people renting for the foreseeable future”