The residential home sales data for the month of May is in. Here's what I find the most shocking:
- There is a 12.6 months supply of homes on the market!
That is a lot of homes that are currently for sale. The total number of active residential listings in the Beaumont MLS is 1,832. In May 143 homes closed and title transferred to a new owner. At that pace it would take over a year for all the homes on the market to sell if no other homes were listed for sale.
Keep in mind the definition of a balance supply of homes on the market- as defined by The Real Estate Center at Texas A&M- is a 6 month supply. It looks like the Southeast Texas housing market is a little out of balance.
What's it mean?
Downward price pressure. When buyers have a lot of homes to choose from then typically prices go down. Remember the law of supply and demand from those high school days.
But wait, just a minute...
Before you go around making offers of half what the seller is asking, keep this in mind. Most sellers that are not distressed sellers- not a short sale, REO, foreclosure or pre-foreclosure seller- are only negotiating about 5-10% off of their original asking price.
Read that again. Maybe that's why we have multiple offers coming in on the foreclosures. When homes are priced below market value the buyers are competing to get the homes. In Southeast Texas we don't have a market flooded with distressed sellers. You have to look to find them.
So the May home sales data is a little confusing. There are a lot of homes for sale. However, we still have homes receiving multiple offers from competing buyers. Its important to have the best market data on hand when you are ready to make an offer. If you need help, you can contact me. It might save you a lot of money.