Q: Denise, I hear you talking about a reduction in inventory, yet in my area we have seen the number of homes on the market increase … Are you sure inventory numbers are going down?
A: Yes, nationally these numbers are going down, but remember, real estate is local. You may be in an area where the employment situation is different than what the country is seeing as a whole or your area may not be seeing that inventory being absorbed as quickly due to prices being high in relation to rent, the number of foreclosures trickling into the market, or even due to weather!
I recommend going into your MLS and looking at the available inventory over the last five years and chart that out to see how the numbers truly stack up. Then compare this to the number of homes under contract. Create a two-line graph and see how close – or far apart – these two lines are. If you are seeing those lines get closer together, then your demand should be keeping up with your supply. However, if you see the lines getting further apart, then it is time to take a closer look at indicators such as price points and styles of homes. Even within a market with an increasing supply of homes, there will be pockets that are selling faster than others. The key is to find those pockets as those are the opportunity points in your market.