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Why is NOW the Time to Build Listing Inventory?

December 17, 2013 10:36 am

12.17 Blog ImageThough the housing market is in the middle of a strong recovery, the one issue that still remains a challenge is inventory. Demand is currently strong and Frank E. Nothaft, Chief Economist at Freddie Mac, projects that 2014 will be the best year for home sales since 2007. We must make sure that the supply of homes matches this demand. The Federal Reserve Bank of San Francisco (FRBSF) recently published an Economic Letter with their thoughts on housing inventory and where it may be heading. Housing Inventory and Rising Prices The good news is the FRBSF research reveals inventory will increase as prices rise: “Formal statistical tests indicate that changes in house prices have a causal effect on inventories and the two series are tied together in a long-run relationship. This makes sense. All else equal, rising house prices should make homeowners more willing to sell and inventories should rise.”