Nevada County currently has 3.4 months of single family home inventory where 12 month ago there was 6.7 months available. This is a great time to purchase a home as prices seem to be positioned to move higher. Rates have come down a little in the past week and not many agents are data hounds as I am and if they are they don't often share the information.
The numbers are a little skewed as the over $500,000 homes are plentiful where the under $200,000 are receiving multiple offers.
- According to dictionary.com, “the relationship between supply and demand determines the price of a commodity. This relationship is thought to be the driving force in a free market.”
- 1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
- 5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
- 7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.
In real estate, supply and demand is represented as the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).
Most real estate professionals know, or at least have a good idea of, the month’s supply of inventory in their market. But why? Because of its effect on pricing moving forward.
While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline by which to go:
Listed below are graphs and statistics, if you have trouble seeing them email me and I will send you a PDF file.
Scott Hopper - Realtor, 530-477-2277
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