A change to a key market stat has occurred this month signaling what could be a shift in the Charlotte real estate market. The month’s supply or inventory statistic represents how many months it would take for the current inventory of homes for sale to sell out based on the historical rate of sales. For example, suppose there are currently 6 homes for sale in a given area. Suppose there were 12 homes sold in that same area in the past year. That rate of sales is the equivalent of 1 sale per month. This means it would take 6 months for the six homes currently available to sell, yielding a supply equal to 6 months. When the supply is equal to six months, the market is considered to be in balance. When it is less than six months, we have a sellers market and when it is greater than six months, we have a buyers market.
In February of this year, the supply for Mecklenburg county was 5.75 months which was considered a sellers market. As of March, the number jumped to 6.48 months supply. The size of the jump itself is not significant, however it does represent a mindset shift. The negotiating power may be moving back in the direction of the buyer.
Now, we have to take this news with a grain of salt. Keep in mind that the housing supply in March of 2013 was 6.67 months so we are basically back where we were this time last year. Last year, homes sold faster than they came on the market which caused the months supply to drop and the shift to a sellers market occurred in September 2013.
In 2014, more homes seem to be coming on the market than they did last year. So even if the number of sales remains constant, the months supply could show an increase. Only time will tell. This is a very important statistic to keep our eyes on, but we’ll need a few more months of data to better understand what’s really going to happen through the rest of the year.
To check out all of our monthly stats visit the Market Stats page on our new website.