November 2011 Residential Home Sales – Best in Seven Months
I know I’ve been posting more residential real estate news over the last week or so than I have commercial. Commercial real estate pretty much shuts down this time of the year unless you have a year end closing. Plus, we’ve had some relatively bright residential news over the last week or so.
The Commerce Department reported that single family home sales rose to a seven month high in November, and more importantly, unsold inventory is at its lowest level point in 5 ½ years. Unsold inventory is at about six month’s worth of supply so that’s considered ideal and should generate some moderate price gains.
It would be very nice if it stayed this way, but it won’t. Too little supply means rapid price gains and we get to our next residential real estate bust that much quicker and yes we will have another bust someday. We do it about every seven or eight years whether we need to or not. Reasons will likely be different as they are each time it happens, but it will happen. If we have moderate sustainable price growth we might be able to delay the day when it will happen again.