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Yesterday I mentioned the idea of slightly more inventory could lead to more sales and faster-rising prices – but too much could freeze up the demand.

Is there history upon which we can reflect?

We know that the local market in 2013 reached full-blown red-hot frenzy level. Inventory for the first nine months rose 12%, and sales rose 10% – and pricing went ballistic.  We probably won’t see it that hot again.

NSDCC Listings and Sales, First Nine Months (Jan-Sept.)

Year
Number of Listings
Median LP
Number of Sales
Median SP
L/S Ratio
2011
4,308
$949,000
1,980
$835,206
2.18
2012
3,655
$975,000
2,322
$825,000
1.57
2013
4,091
$1,159,000
2,554
$945,000
1.60
2014
3,930
$1,249,700
2,183
$1,028,564
1.80
2015
4,068
$1,295,000
2,362
$1,090,000
1.72
2016
4,187
$1,399,000
2,272
$1,170,000
1.84

But consider the 2014-2015 differences.

The inventory went up 4%, and sales went up 8%!  But there wasn’t much increase in list pricing (under 4%), which probably helped to soothe the buyer anxiety, and keep things moving.  The median sales price did rise 6%!

How about this year?

Another 3% increase in inventory, but a 4% decline in sales.  But look at the increase in the median pricing – an 8% rise in the median list price and 7% increase in the median sales price, with both at all-time record highs.

There is a fine balance between sales and price, but I think if sellers can keep their pricing enthusiasm in check, the party will keep rolling!  Can we all live with appreciation around 0.5% per month, where it has been for the last three years, and expect that it could be a little less as prices enter the stratosphere?

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