Housing Market Continues Strong

Housing Market Continues StrongAs we near the end of our current market year, I find it informative to look back on the market performance over the course of several months to better understand what may be ahead of us. That is what I bring to you in this article.The chart above is for the Bellevue East area, but it is typical of what is going on in most of the other neighborhoods around the Puget Sound area and thus a great example to use for this discussion.Active Inventory (orange line):Total active inventory at any one of the data points is shown by the orange line and references the number of homes shown in the vertical axis values on the left side of the chart.Pending Sales (blue line):Pending sales are tracked for the previous 30 days for each data point and shown on the chart as the blue line.  The number of homes pending is also referenced to the vertical axis values on the left side of the chart.Months of Inventory (black line):The months of inventory is calculated by dividing the number of “Active” homes by the number of “Pending” sales.  This value is charted by the black line and references the values in the vertical axis at the right side of the chart.  This value is in months of inventory.Market Perspective:To provide some perspective, a balanced market will have approximately 4 to 6 months of inventory. When inventory rises above 6 months, it becomes a “Buyer’s” market. We continue to remain a very strong “Seller’s” market.In Summary:Our market remains very strong even as we enter the holiday season of the year, and it has been very consistent throughout the year regardless of the large fluctuation in both the Active inventory and the pending contracts.I will leave the forecasting of what’s ahead to the economists, but if we were to simply extrapolate from the past to predict the next few months of housing market strength, it would appear to remain very strong well into the spring months of 2017.- Bill Badgley