Increase in inventory...finally. Early but let's see if it continues.

As you probably know, we scour the new listings every day for signs of a change in the market. Today we can report what looks like a significant change over the past week. A total of 2,103 of new listings have been added to the ARMLS database in the last 7 days, This is up over 19% compared with the same period in 2019 and up over 8% compared with the same 7 days in 2018. New listing counts have been exceptionally weak since April, but just as we saw a surge in new listings between March 19 and April 3, we are now seeing something similar. The first surge in March occurred at the same time as the initial rise in COVID-19 cases began to seriously impact the housing market.

The underlying reason for the current surge in new listings is not entirely clear, just yet. It could be due to a number of reasons, including the sharp increase in COVID-19 infections since the low of May 25. It could also signal some lack of enthusiasm by landlords given their exposure to inadequate rent collections. Certainly purchases by investors have been unusually low in the last 3 months and restrictions imposed on evictions and high unemployment are not good market conditions for landlords. The percentage of homes purchased by investors in June 2020 was the lowest since 2004. Some landlords may decide to sell while the market is frothy. We will need to do further digging to determine the owners of these new listings. This requires a cross-reference between the ARMLS database and the assessor's database, since the owner data is frequently omitted from the MLS listings.

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Because 'life happens' in the ebb and flow of market cycles, opportunities shift accordingly.

We know there's a spike in the luxury sector - both inventory and sales, even while the helter-skelter of the low and mid-range markets continues to be 'frothy' - that word from above makes me smile for some reason. What strikes me in reading the Cromford Daily Observation above is that the perceived negative turn for landlords and investors could create a sliver of opportunity right where the market is most difficult - working with first-time buyers.

This is really 'early' speculation, but here's the rationale:

1. IF we continue to see an increase in inventory, particularly in the 'starter' home range, it could signal some relief to Millenials looking for that first home AND

2. There may be listing opportunities by identifying absentee owners who see the combination of forces (travel restrictions; 'inadequate rent collections'; and yet a screaming hot market) as a good time to consider selling.

If you wanted to explore this further, you'd need a way to easily identify absentee owners. This short video is the 'how to' I created some time ago on using Monsoon in FlexMLS to generate a database of absentee owners who are from where you're from (common ground) is a perfect tool for this