Homes listed for sale plummeted across 96% of major U.S. markets and the Big Bear real estate market is looking to be on the same path.
If you asked an economist why home prices have broadly fallen over the past 2 years, you’d get a short lesson in Supply and Demand.
Too many homes for sale and not enough people to buy them pushed values lower until a balance point can be reached. Looking at the chart at right, that balance point may be fast approaching.
According to data compiled by ZipRealty, the total number of homes listed for sale fell in February 2009 in 23 of 24 major housing markets.
This is an especially important data point because home inventories typically rise in February, ahead of the Spring Home-Shopping Season. It is a bit later in Big Bear as we typically see our rise in inventory near the end of Spring and beginning of Summer as that is the peak selling time.
Since 1982, February home inventory on a National level has been up 3 percent on average. Last month, it fell.
So, in support of the Supply and Demand Theory, we shouldn’t be surprised that the rate of price decline as shown by the Case-Shiller Home Price Index is easing in a lot of markets, too.
We may not have reached the National housing market bottom yet, but if we haven’t, the data shows us we’re likely very close.
What does this mean for Big Bear? If we continue to see the same data we are seeing now – home inventory dropping, sales increasing, and the percentage of price drop leveling off – the bottom has been reached. Tough part is, just like the top of the market, you won’t know until 3-6 months after we have seen the bottom that we where in the bottom.
Home Listings for February Stayed Steady
The Wall Street Journal, March 5, 2009