Want a visual for the balance of power in the Baltimore metro area housing market? This is pretty much it.
The months of supply -- how long it would take to sell all homes on the market at the current pace -- dropped to hardly anything during the housing boom/bubble and zoomed upward after that. (The 2009 dip came as buyers reacted to the federal tax credit for first-time purchasers.)
Low supply equals power to the sellers -- you can really see why buyers found homes purchased out from under them if they didn't bid immediately back in the 2003-2005 days. High supply? That's a buyer's market, with sellers pressed to lower prices and cover closing costs. Economists normally say the point at which supply and demand balance out is around six months.
The chart above, which I put together using Metropolitan Regional Information Systems data, looks at the changing balance of power in the month of September from 1999 onward. It's a simple calculation -- number of homes listed for sale divided by the number of sales in that month. (Some suggest dividing listings by the average number of sales for the past 12 months, to smooth out seasonal gyrations, but since we're comparing September to past Septembers, I figured the newest numbers would be best.)
So, those of you (actively or nominally) in the market for a home: Do you feel as if you've got more power now than you did a year ago? Or are other market forces blowing you off course?