We’ve all seen recent news articles about the slumping residential real estate market. These articles mostly reflect national trends. Real estate is very local, so let’s take a look closer to home. I have chosen to focus on Montgomery County, PA, an area I work heavily in.

The first thing I will examine is the volume of current listings. This will help show us where the market is at. Is it a sellers’ market with a lot of buyers competing to purchase just a few, scarce listing, or is it a buyers’ market with numerous sellers trying to attract just a hand full of buyers?

You can see in the above chart that the number of active listings in Montgomery County has been on a steady decline since May 2018, and is now at its lowest point in the past 12 months. Does this mean we are in a seller’s market? That depends on the other side of the equation. What are buyers are doing? The following chart shows the number of sales over the same period.

The number of sales has also decreased. The question becomes, which has dropped further? One of my favorite statistics to follow is inventory accumulation. The following chart shows months’ supply of inventory.

The left axis shows us how many months it would take for all listings on the market to sell, given the current rate of sales per month. Most experts agree that this should be below 6 months in a healthy residential real estate market. For most of 2018, Montgomery County was below that threshold. Currently, our inventory level is closer to 7 months. This doesn’t necessarily mean that supply is outstripping current demand. Residential real estate markets tend to be seasonal. Inventory accumulation was also high in February 2018, as sellers placed their homes on the market in anticipation of the spring home buying season. That inventory was quickly absorbed in in March 2018.

We will all be watching the spring market very closely to see what happens with the current supply of homes listed for sale. What I can say is that in Montgomery County, the sky is not falling at the moment.

Padove Appraisal Service is a full service residential real estate appraisal provider, dedicated to helping property owners make better informed decisions. You can always be sure you’re getting the most accurate home appraisal for your money every time you come to us for your residential appraisal needs. We serve Philadelphia PA, along with Montgomery County, Delaware County and Chester County PA.