Just in time for the late spring market, our inventory of homes for sale is building up.
The other night, an offer night and I was standing at the end of another driveway in another nice neighbourhood talking like I like to do with a couple of other real estate agents.
We were competing with each other inside on behalf of our buyers, but outside we are colleagues. Realtors for the most part work alone so it is nice to chat and test out our assumptions with each other. We can’t talk about the offers so we talk about the market, what else?
I was a relative newbie amongst the three of us that night, with just a decade of real estate experience. The other two agents had 30 and 31 years experience respectively, or so they said and I believed them.
Of course we were talking about how crazy the market had become over the past year and the one agent, the one with 31 years experience said, “I knew it was going to happen”.
I asked him (skeptically) how he had known.
“Inventory”, he said. “I saw it shrinking at the end of 2015, so I knew the jig was up”.
Today, the day I write this post, there are 345 single family homes on the market in Kitchener Waterloo. A couple of weeks ago that was hovering at about 300.
Inventory and the markets
To determine what kind of market we are in, the easiest way is to find out how much inventory we have. To do that for a given period (usually a month) the formula is:
active listings / sold (or pending) listings = inventory
- A Buyer’s market will have more than 6 months supply
- A Balanced market will have 3 to 6 months supply and
- A Seller’s market will have less than three months
A quick look at Kitchener Waterloo on this day shows
677 active listings with 714 sold pending = 0.94. There is less that a month’s supply of inventory. We are still in a seller’s market. Clearly we are not replacing the home sold with new inventory yet.
If we look just at detached homes there are:
362 active listings with 431 sold pending. = 0.83 or less than one month’s supply of homes. It is a Seller’s market.
And if we look at everything but detached:
315/283 = 1.1. Seller’s market
136/72 =1.8. Seller’s market but maybe a little slumberous
Price range $300-600k
362/455 = 0.79. Very hot
Price range $600-900k
91/89 = 1.02. Not too shabby