Published 19 October 2019
There are several indicators that point to whether a real estate market favors buyers or sellers. One of the easiest to measure is the month’s supply of homes for sale. The number clarifies how many months it would take to burn through the current supply of properties at the current sales pace if no new listings were added to the inventory.
A high number indicates a buyer’s market, while a low number signifies that sellers have the advantage. A balanced market is one that favors neither buyers nor sellers and contains a four- to six-months’ supply of homes.
According to a Sept. 19 report released by the St. Louis Fed, the U.S. month’s supply for all properties was 5.5 months in August. Determining the month’s supply is as easy as dividing the number of active listings by the number of sales closed in the previous month.
According to an Oct. 15 report from the Las Cruces Association of Realtors, the supply of Las Cruces-area properties ranges from two months to one year, depending on the price range.
Take, for example, homes priced under $100,000. According to LCAR, the supply will last 2.1 months at the current sales pace. The inventory of homes priced between $100,000 and $200,000 will be exhausted in just two months if no new listings were added to the inventory. Homes priced between $200,000 and $300,000 will be exhausted in three months.
LCAR also reported that there’s a 3.8-months’ supply of homes priced between $300,000 and $400,000, and a 6.7-months’ supply of properties in the $400,000 to $500,000 price range. The report also indicates that the $500,000 to $600,000 range contains a 12-month supply. Jumping ahead to the $800,000 to $900,000 range, the month’s supply is five months.
Since no sales in the $700,000 to $800,000 and $900,000 to $1 million and above ranges were sold recently, those months’ supplies are immeasurable.
Months’ supplies notwithstanding, a total of 1,706 new and existing Las Cruces-area homes, townhomes and condominiums were sold through October 15 of this year. The total through the same period last year was slightly higher, at 1,757 units. Will sales during the last quarter of the year be high enough to catch and exceed the total of 2,115 homes sold last year? Only time will tell.
See you at closing!
Gary Sandler is a full-time Realtor and president of Gary Sandler Inc. Realtors in Las Cruces. He loves to answer questions and can be reached at (575) 642-2292 or Gary@GarySandler.com.