Inventory shortages across the country have clearly had an impact upon overall valuation of properties and also the days on market properties take to sell.
As the economy continues to build up momentum, and inventory shortages become tighter and tighter, the first-time home buyers becoming more creative in their pursuit of homeownership. Typically, in the past, there have been a percentage of entry level homes available for sale in most neighborhoods. But those homes that might have been considered to be entry-level homes have been scooped up by home flippers who have jumped in and renovated to sell them at much higher prices in the more desirable neighborhoods. In some ways, the home flipper industry has undermined the first time buyer market segment in their search for the next potential flip.
According to the National Association of Realtors, overall, housing inventory has fallen by 9.5% year-over-year in November.
And while the mortgage rates have remained generally at historic lows, first-time buyer inventory in many desirable markets seems to have vanished. This is not only the result of the low interest rates but also a very strong economic climate that continues to push home prices higher in most markets year-over-year.
But the metric, days on market, is also telling another story, that homes are not selling faster, but they are selling for more, anywhere from 3.5-4.5% on average.
But in New Jersey’s real estate market is telling a different story.