As of January 2nd, 2018, there were just 11,225 homes on the market in Massachusetts, a decrease of 14% compared to the same day last year when there were 13,023 homes on the market. This is also the lowest it has ever been on record with 2,000 as the only year that was close- 11,402 homes on the market!
What does this mean?
As Anthony had mentioned in his 2018 predictions, this is setting us up for more bidding wars than ever before! Since MLS began recording inventory numbers in 1995, every January has had a higher inventory of houses on the market than there are currently. Week to week in 2017, inventory of homes for sale has tracked an average of 17% lower than the same weeks in 2016. Below is a line graph that illustrates the comparison of the two years. As you can see there is a significant correlation between week to week each year, when one dips so does the other. The craziest part is that the inventory gets lower and lower every year.
How does this happen?
Contrary to popular belief, it is not that there are that fewer homes being listed for sale. In 2017, there were 104,761 homes listed compared to 2016 when there were 106,494 homes listed which represents only a 1.65% decrease. The biggest reason for the low inventory is the homes listed each week, are for the most part, immediately going under contract, which keeps inventory low. The average days on market for a property in MA was almost 31% lower in 2017 than it was in 2016. This is the ‘Pac Man Effect’ Anthony explained in a May 2016 Market Report. Homes get listed and quickly get gobbled up.
How does this affect Sellers?
The lower the inventory, the more lucrative it is for sellers. Buyers have fewer homes to choose from, so the demand for the limited amount of homes available goes way up. This is terrific news for home sellers and those considering listing at any time in the next 90 days. If you have thought about selling, now is the time to get the ball rolling! This is exactly why we always say listing in the winter is best! Here is a blog about prepping your home for a winter sale. The only true concern for sellers at a time like this is once their home sells, where do they go? Click here to learn about our sell without listing program and some of the options we can provide for our sellers.
What if you are a Buyer?
This is notoriously a time for the inventory to be lower than the rest of the year, which can be difficult for buyers who have specific requirements for the home they’re trying to find. Homes tend to go quickly in the winter – sometimes before they’re even listed. If you are in the position to purchase a home in the next month or so, you must be prepared so that you can jump on a home as soon as you are sure you want to make an offer.
Your first step is to hire an agent who can assist you so that you are ahead of competing buyers and you need to obtain mortgage preapproval if this applies to you. A qualified agent will be able to get you ahead of the game, coach you through bidding wars, and streamline this sometimes-tumultuous process when it’s this competitive. Also, you can tell your agent to call on any homes that didn’t sell in the fall and see if they are willing to consider offers now. Some agents may even be able to gain access to homes before they’re even officially on the market – so make sure hire a good one. We know a few!
Get the report for a town near you!
We ran the numbers for several towns and areas across Massachusetts. Scroll through the charts below to find the closest to you.