As you probably remember, our region’s real estate problems began in 2006. During the first seven months of 2006, 110,000 existing homes were listed for sale in the DC and Baltimore regions. That flood of homes would have been great in 2003 or 2004, when there weren’t enough homes to satisfy eager buyers.
Unfortunately, buyers stopped buying, so those homes just sat on the market as their owners watched home values fall.
Eventually the number of resale listings fell to just 64,000 in 2012 (Jan-July). Finally there was some balance between the quantity of homes entering the MRIS database, and those leaving the database because they had been sold.
This year, however, listings began to climb once again. By the end of July, we had seen 8 percent more resales listed than during the same period last year. (See chart below.)
Morgan Knull, associate broker with Re/Max Gateway, has some ideas why listings are going up.
“A lot of people deferred selling and moving for several years, but now they see that the time is right to make that move,” Knull says. “Others had tenants in properties they couldn’t sell, but now they can. Some folks who were upside down defined victory as just not having to bring a check to the table, and that time has come.”
The reason the market has been so good for sellers this year, despite this rise in home listings, is that unsold inventory is at an 8-year low. (See chart below.) However, if rising interest rates cause sales to slip, the rising number of listings could push up the unsold inventory next year. That could dampen buyer competition.
The increased inventory is twofold. Typically, the beginning of the year starts out slow and then listings pick up as we head into spring and summer. Additionally this year, homeowners are taking notice that it is a seller’s market and capitalizing on increasing sales prices in our region.