According to the graph, prices had been steadily increasing since November of last year with continued growth through the first quarter of 2011. Then, as inventory began to climb, the corresponding median price sharply reversed itself.
Analysis:
There is a very well defined trajectory of price vs. inventory. This is a very basic view of supply & demand. In this case, price and inventory have pretty much remained inversely proportional. That is to say, when the inventory increased, the prices declined.
Conclusions:
What my personal experience during the first quarter tells me is that declining inventory leading up to January set up conditions for higher median prices as potential sellers held off from listing. In conversations with owners during the first quarter, I found that the particularly cold and snowy weather encouraged many to hold off from putting their homes on the market until warmer months approached. However, I observed an early upswing in buyers ready and able to purchase with only the existing inventory to choose from. Then, as the more traditional start of the spring market took hold, those sellers no longer held back, providing the remaining buyers many more options to choose from. Price seems to be behaving very sensitively toward the number of homes on the market when other factors that affect prices appear to be relatively stabilized for the moment.
There have been approximately 20 homes to go under contract in the last 30 days in Smithtown. That means that while price has come down homes are continuing to sell. If you are thinking about listing your home, awareness of your competition and pricing is paramount to finding a motivated buyer.
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