Inventory growth slows

After 11 consecutive months of Year on Year (YOY) increases in the inventory of Single Family Homes (SFHs) for sale in the 34 cities and towns of Essex County, July saw a very slight decline – but still a decline, ending the streak at 11 months.

The first chart shows the numbers for the months of January to June; the second for July through December. While inventory is close to 2017 levels, it is still way below 2016 numbers.

Housing Inventory
Housing Inventory

There was no similar slowdown in the growth of Condos, possible because this is the segment of the market which sees most of the new supply, and the YOY number increased for the 14th consecutive month. That new supply helps to see inventory exceed 2017 levels, but it is still well below that of 2016.
Housing Inventory
Housing Inventory

One of my favourite comments is the importance of understanding the difference between relative and absolute. In this case, while there may be relatively more SFHs and Condos for sale than a year ago, in absolute terms the number is still very low.
If we accept “conventional wisdom” that a market in equilibrium between buyers and sellers has 6 months of supply, the market is still heavily slanted in favour of sellers. The supply at July 1st in Essex County for SFHs was a little over 2 months while for condos it was a little below 2 months.
But that is the starting point for a more detailed analysis, as conditions vary greatly by price and by town.
Check back tomorrow for a breakdown of supply at different price points for North Shore towns.

Andrew Oliver
Market Analyst | Team Harborside |

Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205

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