Homebuyers, Beware: You’ve Got Competition

For prospective homebuyers, the latest data from the Fels Institute of Government at the University of Pennsylvania may not seem like good news: The number of homes listed for sale in our area has hit a new post-bubble low. But that dip in inventory has an important upside. In his most recent quarterly report, Fels Senior Research Consultant Kevin Gillen writes, “A return of inventories to their historic average levels is a critical condition for the housing market’s recovery, as high inventories represent excess supply, thus placing downward pressure on house prices.”

Today, Gillen notes, there are roughly 32,000 homes listed for sale in the area, which is surely enough for anyone to choose from. In mid-2008, when the inventory peaked, there were 56,000 homes listed for sale. That 42% decline is very good news. There was an even further decline in condo inventory.

For more information from Gillen’s quarterly housing reports: Fels Research & Consulting: Housing Report