Are We Heading Into A Buyer's Market In 2024?
In this blog post, we'll dive into the fascinating dynamics of Central Virginia's real estate market. Are we currently in a buyer's market, or are we heading in that direction? These are the questions that have been on the minds of many homeowners, prospective sellers, and active sellers. Let's break it down and gain a better understanding of the current market trends.
Understanding Buyer's and Seller's Markets
Before we delve into the specifics, let's clarify what constitutes a buyer's market and a seller's market in the real estate industry. The key metric to keep an eye on is "Months of Inventory" (MOI). This metric reflects the rate at which homes are currently selling and estimates how long it would take to deplete the existing inventory. For instance, if there are four homes on the market, and one home is being sold each month, we have a four-month supply of inventory.
The higher the MOI, the more we lean toward a buyer's market, while the lower the MOI, the more it tends to be a seller's market. A visual reference for this concept is that a six-month supply of inventory is considered a balanced or neutral market. Anything above that indicates a buyer's market, and anything below signals a seller's market.
Current Market Snapshot
Now, let's take a closer look at the data from Central Virginia's multiple listing service (MLS), which catalogs all real estate sales and activities in the area. The numbers show that we are currently hovering around a .9-month supply of inventory. Remarkably, we've been below a one-month supply of inventory since the pandemic hit in March 2020.
What does this mean? It unmistakably indicates that Central Virginia is very much in a seller's market. By the technical definition, it's even considered an extreme seller's market. In fact, if the market were to cool down slightly, it would need to slow down significantly to reach a balanced market, let alone becoming a buyer's market.
So, are we heading into a buyer's market in Central Virginia? It appears that the current market conditions suggest otherwise. While it's possible for the market to experience some cooling, we'd likely still find ourselves in a seller's market. The data and metrics indicate that significant change is required to shift the balance towards buyers.
If you have any lingering questions or concerns about these market insights, please feel free to share your thoughts in the comments or even challenge the information provided. Your feedback is valuable, and it can further enhance our understanding of Central Virginia's real estate landscape.
Thank you for tuning in, and we look forward to bringing you more real estate updates next month!