New data released yesterday by the Minneapolis Association of REALTORs shows a trend discussed several times on this blog: the amount of inventory on the market continues to fall from the historic highs we've seen over the past 4-5 years. In fact, inventory has fallen to roughly 2004 levels, and is down 25% in just the past year.
For the past few years, the buzz has been that we are in a "buyer's market". Buyers could get everything for nothing, and sellers were simply at their mercy. However, this data confirms what many have been noting: there is significantly more balance in the market than housing prices seem to indicate. Most economists feel that it is only a matter of time before the decrease in inventory leads to small price increases.
This is not to suggest that the housing market is out of the woods yet - a disproportionately high amount of sales continue to be foreclosures and short sales. Many analysts fear that these distressed sales will continue to put negative pressure on traditional sellers, and it is tough to estimate exactly how many properties are in the foreclosure pipeline.
At the end of the day, we continue to see signs of life in the real estate market, but it will be interesting to see just how long it takes until we see a "normal" market again...whatever "normal" means.
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