Aug 26, 2015
I have been tracking inventory each week for more than 20 years and closely observed decades of fluctuation. Most recently, one of the defining adjustments after the crash has been a drop in the number of houses for sale.
While the spring market was incredibly positive, inventory is still 25-30 percent lower than the pre-recession market.
For example, inventory in Ladue typically fluctuates between 150 and 220 homes for sale depending on the time of year. At the beginning of this year, there were 125 homes for sale in Ladue, which rose to 165 listings recently. As a reference point, during 2013 inventory was as low as 95 homes for sale in Ladue.
Of course, the market is cyclical. More homes are listed for sale in the spring than in the fall. However, the cyclical nature of our business has weakened considerably as most consumers are selling their homes prior to purchasing a new one.
Historically, a consumer would buy and sell simultaneous – listing their current home, while shopping for a new one. The post-recession consumer is a seller that does not turn into a buyer – or even begin looking for a home – until that seller has a contract on their listed home.
As a result, the cyclical nature of the business no longer sees the extreme peaks and valleys of spring and winter but rather smooth, seasonal ebbs and flows. Until consumers still feel more certainty in the financial market, I believe this trend will continue.