The fourth quarter is upon us. In the residential real estate industry this means that time is ticking to help buyers find a home or get a listing sold before the market dwindles. Typically the residential real estate market remains strong through October, begins to wane in November and slows considerably after Thanksgiving (Nov. 24, 2016). There is still time, but not much.
Looking forward, I anticipate a strong fourth quarter based on the past few years and the strength of the current market. In the recent past we have experienced an unusually strong fourth quarter. There are several theories that try to explain this. In my opinion, the main reason is because of the lack of inventory. Many buyers have been unable to secure a home purchase during the prime spring and summer markets and are now looking later into the year. In September new listings increased 5.6% over September 2015, while year to date new listings remained flat. Therefore, if my opinion is correct buyers will have more options to choose from which should boost sales in the remaining months of 2016.
Year to date, the residential real estate has been strong. Below are a few stats to support that statement:
YTD 2015 YTD 2016 +/-
New listings 65,191 65,148 -0.1%
Closed Sales 44,358 46,514 +4.9%
Median Sales Price $220,000 $232,739 +5.8%
Month’s Supply of 3.5 2.8 -26.1%
Homes for sale
As I’ve written consistently, what the market yearns for is an increase in listing inventory. As you can see, we had a slight decrease in new listings year to date. However, it is encouraging that in September we saw an increase of 5.6% over the previous year. While listings have remained flat, demand has increased which is evidenced in closed sales. That’s very good news. The bad news is that the combination of flat listing numbers and increased closed sales has resulted in a low Month’s Supply of Homes for Sale. In fact, 2.8 months is the lowest September supply since we started tracking this stat in 2003. Generally, five to six months of supply is considered a balanced market.
Overall, it has been a great year so far and we anticipate a strong fourth quarter to finish 2016. Thanks for reading. Stay tuned!