A view of the Months Supply of Inventory (MSI) for the first quarter of 2010 shows the differences in the pace of sales within pricing segments. MSI represents the number of months it would take to sell the For Sale inventory at the current sales pace. Over 6 months is a Buyers Market, 3-6 months is a Neutral Market and under 3 months is a Sellers Market.
We are seeing the first signs of pricing stability in the under $100,000 market and even in some segments of the under $200,000 market. For our five county market the under $100,000 the MSI is at 3.2 months, a neutral market. For $100-200,000 the MSI is 6.3 months, just above neutral and for over $200,000, 10.4 months, still a strong Buyer's Market.
We are anticipating the year to be a roller-coaster, furious activity the first six months with a slow down the second half. But keep in mind the hot first half is being compared to a really slow 09' and the second half of 10' is being compared to a really strong 09'. So the stats will show a market looking much worse after June than it really is. None the less, it will be slower, since the core economy has not picked up enough to make up for the loss of tax credits and the possibly of rising rates. All that said, the web traffic increases we are seeing show that just as there is a shadow inventory of bank owned homes hanging over the market, there is also a shadow inventory of buyers just waiting for some consistent good economic news to jump into the market.
Click here for the graph that will give you a relative feel for the strength of the market, by showing the seasonally adjusted annualized rate of sales for the five counties. You can see that the annual sales pace has been on the rise since the summer of last year. Most signs are good, however the value appreciation light is still not green, so sellers need to remain aggressive with pricing.
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