Understanding The Difference
Inventory is the main component in determining whether we live in a buyers or sellers market. When there is more inventory than buyers, it is a buyers market. The opposite applies also; when there is more buyers than there is inventory, it is a sellers market.
How This Applies To Metro Detroit
When the market crashed several years ago, it was flooded by bank owned foreclosed homes. Over the last few years, the market has slowly absorbed and purchased these bank owned properties. There has been a significant decrease in the amount of foreclosures on the market, as well as short sales. At the peak of the housing decline there were approximately 50,000 properties in the multiple listing system. Currently there is approximately 33,000 homes for sale. This reduction of almost 40% in inventory, and people buying approximately 5,000 homes a month in Metro Detroit leaves us with about 6 months of inventory. Since less homes are appearing on the market to satisfy the demand, we see a significant increase in the selling price of these homes. If you are considering buying a home in the near future, act hastily as prices are only going up.