A Tale of Two Markets: Inventory Mismatch Paints a More Detailed Picture

The inventory of existing homes for sale in today’s market was recently reported to be at a 3.6-month supply according to the National Association of Realtors latest Existing Home Sales Report. Inventory is now 7.1% lower than this time last year, marking the 20^th consecutive month of year-over-year drops.

Historically, inventory must reach a 6-month supply for a normal market where home prices appreciate with inflation. Anything less than a 6-month supply is a sellers’ market, where the demand for houses outpaces supply and prices go up.

As you can see from the chart below, the United States has been in a sellers’ market since August 2012, but last month’s numbers reached a new low.

Recently Trulia revealed that not only is there a shortage of homes on the market in general, but the homes that are available for sale are not meeting the needs of the buyers that are searching.

Homes are generally bucketed into three groups by price range: starter, trade-up, and premium.

Trulia’s market mismatch score measures the search interest of buyers against the category of homes that are available on the market. For example: “if 60% of buyers are searching for starter homes but only 40% of listings are starter homes, [the] market mismatch score for starter homes would be 20.”

The results of their latest analysis are detailed in the chart below.

Nationally, buyers are searching for starter and trade-up homes and are coming up short with the listings available, leading to a highly competitive seller’s market in these categories. Ninety-two of the top 100 metros have a shortage in trade-up inventory.

Premium homebuyers have the best chance of less competition and a surplus of listings in their price range with an 11-point surplus, leading to more of a buyer’s market.

“It leaves Americans who are in the market for a home increasingly chasing too fewer options in lower price ranges, and sellers of premium homes more likely to be left waiting longer for a buyer.”

 Lawrence Yun, NAR’s Chief Economist doesn’t see an end to this coming any time soon: 

“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range.”

Bottom Line

Real estate is local. If you are thinking about buying OR selling this spring, let’s get together to discuss the exact market conditions in your area.  Give me a call – J.P. Cook – 602-320-4253.

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17854 W Illini Street Goodyear, AZ 85338

$454,900

3 Beds

2.5 Baths

2,333 SqFt

Status Active

MLS # 6674617

Property Type Single Family Residence

Price Type --

Welcome to the Ash Floor Plan, an exquisite single-story sanctuary thoughtfully designed to elevate your living experience. With 2333 square feet of well-crafted space, this home exudes elegance and practicality. With 3 beautifully appointed bedrooms and 2.5 Baths, the Owners Suite stands out as a true gem, boasting a walk-in closet that caters to your storage needs, keeping your belongings organized and accessible. The Owners bathroom includes a walk-in shower and offers the choice of a super shower or a luxurious bathtub and shower combination, ensuring an indulgent escape to unwind and recharge. Embrace the possibilities with a lovely front porch, versatile flex room and over-sized garage! THIS HOME IS ''TO BE BUILT''.

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8 Calle Dorado -- Tubac, AZ 85646

$454,900

2 Beds

2.5 Baths

1,866 SqFt

Status Active

MLS # 6641244

Property Type Townhouse

Price Type --

Charming Townhome located within the Cielito Lindo Subdivision. This is a 2 bedroom/2.5 Bath home with a 2 car garage. 2 master suites, each with a private balcony. There is a south facing patio of the Dining area that provides panoramic views. The location is close to the Historic Art Village of Tubac with restaurants, galleries, shops and the Tubac Historic Park. Baca Float Water Company. Streets are maintained by the HOA as is exterior painting. Furnishings available by SBOS

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18802 N 7th Place Phoenix, AZ 85024

New

$454,900

3 Beds

2 Baths

1,567 SqFt

Status Active

MLS # 6692120

Property Type Single Family Residence

Price Type --

Welcome to your newly refreshed oasis! This charming home boast a fresh interior paint job that breaths new life into every room. The heart of the home shines with brand new stainless steel appliances, making meal prep a delight. With 3 bedrooms, 2 bathrooms, and a den, there's plenty of space to spread out and make memories. Step outside to your covered patio, perfect for enjoying the outdoors year-round. Don't miss out on the opportunity to call this your own slice of paradise!

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9749 E Jerome Avenue Mesa, AZ 85209

$454,900

3 Beds

2 Baths

1,630 SqFt

Status Active

MLS # 6643948

Property Type Single Family Residence

Price Type --

Beautiful remodeled home on nice corner lot. Parks, community pool, basketball, and tennis/pickle ball right at the end of the street. Solar panels owned free and clear. Attractive landscaping front and back. Upgraded tile flooring. Newer carpet, interior/exterior paint, granite counters, stainless steel appliances, light and plumbing fixtures. Big island kitchen. Living and family rooms. Split 3rd bedroom has double doors for nice office option. Split master bedroom with large bath, separate tub and shower, large walk in closet, double sinks. Attractive security door in front and front walk tile. HVAC is 2011, water heater 2022. Very nice and move in ready! All figures and measurements are approximate - buyer to verify prior to COE.

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