The first month of the year is in the books as we close out the sales for January 2009 in Belmont.
With 40 homes on the market, inventory is showing signs of creeping up. Looking at past January inventory levels, they typically hover in the low 20 range. Higher inventory levels usually means sellers will get less than their asking price as the supply and demand is in imbalance.
Itâ€™s always interesting for us to see why inventory levels are up. There can be several factors but they almost all have a common thread and thatâ€™s the market is slowing down.
Most buyers can easily get a loan, despite whatever impression from the media one might have. Sure you need to have a better credit score than last year, and you actually must have a downpayment now, but lenders are happy to make good loans and theyâ€™re doing so at a frenetic pace.
But if buyers are afraid that the market is tanking, or that they may be about of a job soon, theyâ€™ll sit on the sidelines and the inventory will grow.
Sellerâ€™s who think they had better get out now, or sadly ones who have perhaps already lost their job, need an exit strategy nowâ€”they canâ€™t wait for the market values to return.
Together these factors cause inventory levels to grow and that has an inverse relationship on values.
In Belmont the median price has dropped below $900,000 for the last two months in a row; and though we occasionally dip down under $ 900K (due to a shift in the size of homes selling), one has to go back to 2004 to see the median price stay this low.