The July data for Destin Home Sales is now in. A close analysis reveals an interesting trend developing. The graph below shows the inventory levels of homes in Destin, by month, for 2009. This graph includes all price ranges.
As can be seen, inventory levels have generally been trending down for the past six months. On a percentage basis, the decline is relatively small, but still indicates a leveling off of the market.
The more interesting trend is observed when we analyze what is happening at prices below $500,000. Sales in this range have been extremely strong primarily because they are affordable for more people. The inventory levels for these homes is shown below.
As can be seen here, the inventory is also declining but at a faster rate. There are many ways that inventory can decrease including: expiring listings, sold homes, and increased buying activity. In this case, the decline is a combination of increased buying activity and fewer homes coming to the market.
To better understand the relationship between buyers and sellers, we often look at the months of homes on the market. This is a measure that describes how many months, at current inventory levels and buying activity, of homes are available for sale.
The data for homes priced below $500,000 is looking very favorable for sellers and less favorable for buyers as can be seen below.
Here, we see that at the begining of the year, there was over 20 months of inventory available while now there are less than 10. In other words, the inventory, as measured in months has decreased by over 50%.
The bottoming process is well underway for homes in Destin that are priced below $500,000. This doesn't mean that buyers have missed the boat, but it does indicate that some of the best deals have already passed.
If you have been waiting on the bottom, and haven't already started looking for a home, now is the time. We could see further stagnation in the future but we may not either.
Tim Shepard, Broker/Owner
Destin Real Estate, LLC
Cell: (850) 259-4133
Toll Free: (866) 678-SOLD
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