Across the country according to one report inventory levels are down and demand is up. That's great news, especially for December which can often be the slowest month in real estate (after August). In Anne Arundel County Maryland inventory level is down 32.6% to a modest 2,688 active listings in December 2011 from June 2010 when inventory reach 3,928 active listings. With about 7 months of inventory, Anne Arundel County has moved from a buyer's market towards a more balanced market. Industry experts suggest that 6 months of inventory is where the market is balanced. More than 6 months, it's a buyer's market and less than 6 months it's a sellers market. Markets rarely stay balanced for long. There's no guarantee that the local market will tip far enough to be characterized as a seller's market anytime soon.
What's likely to happen in the next few months?
The trend in declining inventory could be expected to continue until about March. After March Annapolis and Anne Arundel County is poised to start the spring market. And, there may be many sellers you are simply waiting for spring to come to market. As you can see from the chart below, inventory peaks in June. Demand follows a similar curve with the most homes sold in during the same time period.
What about the shadow inventory?
Bank owned foreclosures is one shadow inventory. But there's another shadow inventory lurking in the wings of spring. Not often considered are all the homeowners that want to sell, but, haven't been able to. They may have let their listings expire and or withdrew them. Some of these homeowners might have even given up and are just waiting to come back to market as soon as there's a glimmer of hope that they could sell. Both the shadow inventory of bank owned homes and homeowners waiting in the the wings for better conditions could drive inventory levels back to recent highs.
Interest rates aren't enough!
Borrowing to purchase a home has never been more affordable than it has been over the last year. Interest rates for 30-year fixed rate mortgages are at or below 4%. That's simply an amazing rate. The cost of buying a home is well below that of renting. However, the rent-to-buy ratio remains high in our area continue to depress buyer's desire to own a home. Unless prices come down further, despite low interest rates, buyers may continue to sit on the sidelines and simply wait and watch. This is especially true for first-time home buyers. Other renters anxious to buy a home again are those folks that force to rent having lost their homes to short-sales and foreclosures over the last three years.
This year what other dynamics might impact the spring housing market?
There is often optimism in the run up to the presidential election and euphoria that follows for the year afterwards. The next two years should be very good for the stock brokers and real estate brokers alike since people will be buying with the idea that things are finally going to get better or selling with thoughts that things are going to turn for the worse. We won't know that we've reached a tipping point until we can clearly see it in the rear view mirror.
If you are interested in buying or renting a home in Annapolis, Maryland or the surrounding area and want to tour any property currently on the market, or if you have a home to sell or rent in Annapolis, Maryland and want a professional consultation on current market conditions, please contact me at 410-923-3217 or e-mail me at showell@cbmove.com or visit my website at LiveInAnnapolis.com.
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Stephen Howell came to Annapolis to sail the Bay in 1994. What he discovered was a whole new lifestyle. Ever since Stephen Howell has been successfully helping others make the most of Annapolis. You'll find that with the right professional by your side, you can Live the Lifestyle and Live in Annapolis.
Stephen Howell and Rocky (his lab-mix from the SPCA of Anne Arundel County in Annapolis) live on the Chesapeake Bay near Annapolis, Maryland. He works in the Annapolis real estate market. His website lets people search the Washington and Baltimore metropolitan area MLS. Buyers can also search for waterfront homes along the Chesapeake Bay. His website has current real estate data on Annapolis, Anne Arundel County, and Maryland.





