GRAY – Although it’s not the end-all to the region’s housing woes, the number of homes on the market is a critical factor. Since 2019, the region has slipped into an unbalanced market conditions mode as measured by months of inventory. Balanced conditions range from 4.5 to 6 months of inventory. That’s when buyers and sellers are most often at balanced core negotiating positions. It’s also a factor in putting downward pressuring prices.

Last year the region began slowly rebuilding inventory, but the locked-in effect created by high mortgage rates and a dominant number of local mortgaged properties with rates in the 4% and below ranges hampered the effort. So, owners with mortgages were relucent to market their homes even though they had enjoyed substantial equity increases during the post pandemic housing boom. It’s noteworthy to remember than almost half of all the owner-occupied housing in the regions is mortgage-free.

December’s inventory was down 1.5% from the previous month due to a small monthly sales surge that absorbed the number of new listings coming onto the market. Year-over-year it was 23% higher.

The new home sector continues adding inventory and builder confidence in better financing and material conditions has increased. However, the new home sector is still performing at a little better than half of its pervious peak level.

As we move into the new year, the role of the labor market and wages will play an increasing role in housing market performance.