Yellow – the number of houses that were on the market on the last day of each month. It’s a snapshot of the market. More houses on the market – more competition.
Blue is the number of houses that came on the market each month – new listings.
Orange is the number of contracts accepted each month – we call them pending home sales. Pending homes sales are a leading market indicator of how active the buyer market is.
Gray is the number of houses that were taken off the market because they failed to sell.
2015 – February through August. Houses sold almost as soon as they hit the market and often with multiple offers. It’s the usual story of supply vs demand and we had a very short supply of houses during the Spring market. March and April were wonderful months for sellers, and probably more than a bit frustrating for buyers, since there weren’t enough houses to go around.
Market activity shifted a little over July and August – more houses on the market, but the number of contracts kept up.
2015 – September forward. The month that everything changed.
Imagine you are a seller who has wanted to sell for several years. Throughout the Spring, you see houses selling quickly and with multiple offers. By May and June, you’re thinking this is the right time to sell. But it takes time to prepare a house to sell, and next thing you know, it’s September. But you figure that if the market was good in the Spring, it will be great now! So you pick a price that is…optimistic.
But a couple of things happened. 1) A lot of other sellers had the same thoughts you did. 21 sellers put their houses on the market in September and October. We had a 67% increase in the number of houses on the market. 2) The buyers went away. The one-two punch of more houses on the market and fewer buyers shopping is why, in October and November, so many sellers took their houses back off the market.
I expect that many of those sellers will try again this Spring and I think three things will happen. We’ll see a lot more houses on the market this Spring than we did last year. I think interest rates will stay low and buyers will take advantage. So far, the number of buyers coming through open houses is promising. And I think we’ll still see appreciation, but it will be a little more gradual.
You know what we realtors call this kind of market? Normal! We just haven’t seen normal in over 10 years.