Inventory levels on Nantucket and throughout the US are falling. Following were approximate inventory levels on Nantucket for this time in June:
2008-655
2009-657
2010-642
2011-577
2012-510
According to National Association of Realtors (NAR), the number of properties for sale in the US in April of this year was approximately 2.5mm, which is the lowest number since April of 2005, when the market was booming.
Also, the number of seriously delinquent mortgages is much lower now than a year ago (according to NAR), many of the distressed sales have been bought by investors and banks are better managing the short sale process, so the threat of a large supply of shadow inventory coming on the market and cracking the bottom has gone down significantly.
Following were approximate number of deals in the pipeline on Nantucket for this time in June:
2008-27
2009-18
2010-32
2011-40
2012-43
So, Econ. 101 tells us that falling inventory (falling supply) and rising deal flow (rising demand) make real values go up.
There are several models to measure price movement for the US as a whole. Following is a chart that NAR put out showing what the most widely accepted models are showing for price movement in the US-all positive.
There is a lag effect to these models and I think the market continues to improve, so these numbers could be even better than they show.
So, factoring in a market that is probably coming back, the lowest interest rates in history (5/1 ARM up to $4mm at 2.75%!) and a strong rental market, the stars may be aligned and it might be a good time to jump in. Oh yeah, don’t forget to factor in the lifestyle component;-)