It would be a stretch to use the phrase “selling like hotcakes” to describe home sales in most parts of the United States, but in Mountain View, it’s an apt analogy. Actually, “selling faster than hotcakes” might be even more apt.
In May, homes that sold spent an average of a mere 10 days on the market. Throughout the last year, this number hasn’t gone below 18 days. You have to go back to April 2014, when the figure was 21, to find a month where homes averaged more than 20 days on the market. This frenzied buying pace is a major reason why the “month’s supply of inventory” here gets measured in days.
National inventory comparison
The statistic we call month’s supply of inventory (MSI) tells us how long a current group of listings would remain available should no new listings appear. In Mountain View, the MSI in May was 0.6, or 6/10 of a month, which equals 18 days. This number has been below 30 days for the last four months. For the first quarter of 2015, the average was 0.8, or 24 days.
In that same first quarter, the national average MSI was 4.6 months, according to a May 11 news release from the National Association of Realtors. The document, posted on Realtor.org, implies that an MSI of 4.6 months is not ideal, stating that “a supply of six to seven months represents a healthy balance of supply between buyers and sellers.”
If six to seven months is “healthy,” Mountain View’s average of 24 days in the first quarter must be ready for life support. But then again, if you look at the nature of the market here, you might just call it business as usual.
Over the course of the last two years, the Mountain View homes inventory supply has hovered substantially below that of much of the rest of the nation. The 12 months ending in May 2014 saw an average MSI of 1.15. That average dropped to less than a month — 0.91 — in the year period ending in May 2015.
In fact, in only four of the last 24 months did the MSI hit or exceed 1.5. During this time it has never reached two months.
We probably don’t have to worry about our inventory level being reduced down to zero, but we shouldn’t expect it to bloat to anywhere near the national average any time soon.
Hadar Guibara is a Realtor with Sereno Group of Palo Alto. She can be reached at hadar@serenogroup.com.
