Real estate gurus like to talk about the state of the market and whether it's balanced or not. If the total number of houses for sale is low, it's considered a seller's market. Too many houses on the market? Buyers have the advantage.
Several years ago we saw the cost of houses soar, making it difficult to buy. More recently, we've experienced a surge in the number of homes on the market, which made it more difficult to sell. Now, with the housing market swinging back toward neutral, the inflated inventory of houses has begun to shrink. With sales up compared to last year, it's clear that the real estate market is on the rise.
How does a balanced market benefit me?
When we talk about a balanced market, what we're really talking about is supply and demand. If you're in search of a new home, you want to have plenty to choose from. Too many, though, and prices tend to fall, which means you'll have a tougher time getting the money you want from the sale of your current home. The way experts measure supply in the housing market is by calculating the number of homes for sale versus the number of home-buyers. With a six or seven month supply of houses, we reach that golden state of a balanced market. In November of 2010, the supply of homes in the Kansas City region jumped to nearly 10.5 months. A year later, it dropped to an even 9. If the trend continues, as experts predict, we will continue moving toward a balanced market. If you're selling your current home with the hopes of buying a new one, this levels the playing field, allowing you to both sell and buy at a fair price.