Sold Out By Summer? Madison County Housing Sales are Up & Inventory is Low

The real estate industry performed at record levels in the first quarter of 2018 in Madison County. Sales of residential properties in the 1st Quarter  increased significantly compared to the 1st Quarters of 2017 and prior years. New listings of properties for sale has grown at a slower pace compared to sales resulting in a continuing decline in properties listed for sale, garnering the question, could we be “sold out by summer?”

The supply of homes available for sale has declined significantly since 2010. After a slight rise in 2015, the Months of Supply has dropped in all six price bands. Homes with sales prices below $150,000 have the fewest months of supply at 2.0 months. Comparatively, homes with sales prices above $350,000 had the greatest months of supply at 7.7 months in 2018.

If average inventory of homes available for sale (green line) continues its downward trend and if the number of units sold (blue line) also continues its upward trend then there will be possible increase in home prices if demand for homes continues to rise at its current pace. The red diamond on the graph suggests a point toward the end of the second quarter where real estate sales could be noticeably affected by a declining inventory. Note that a shock to the economy could occur on any given day and would affect demand or supply or both. A simple growth trend calculation suggests that sales could reach 1,800 on inventory of 1,900 if all conditions theoretically remain constant.