By DON FENLEY

Buyers have more choice and better bargaining positions as the local home sales tend slouches toward a pre-pandemic level. That’s because slower sales are allowing faster inventory growth.

July’s active inventory was the best since 2020. At month’s end, the region had 2.9 months of inventory. That’s how long it would have taken to sell everything on the market as the current sales pace. It’s also a prime metric to measure market balance.

The benchmark for balanced conditions is five to six months of inventory. Balanced conditions are closely watched because it promotes a market that favors neither buyers nor sellers. The effect it has on the current market is putting downward pressure on prices. In the long term, it tends to keep prices stable.

The local market’s not there, but the trend is moving that way.

Active inventory growth has been a Whac-A-Mole situation until the last three months of this year. Before then buyers were snapping up new listings as soon as they came on the market. That was capping inventory growth and helping increase the price growth rate.

Slower sales in May nudged the active inventory growth rate higher. It increased more in June and July.

Although last month’s 14% sales growth was a strong monthly recovery from June’s slump, it was only 5% better than July last year.

So far this year the market has averaged 641 sales a month. That’s an increase of four sales a month from last year’s pace and 74 sales a month more than the pre-pandemic monthly average. So, the market has room to absorb slower sales if current conditions continue.

That’s a big if. Other factors at play are more and more sellers are realizing that they will not get the same type deals of years past. The number of multiple offers is down, and contingencies have increased. And a pre-election interest rate cut, and downward mortgage rate trend is whetting buyer interest.

All of this has set the stage for a chaotic third and fourth quarter market.

Categories: REAL ESTATE