Midwest Real Estate Data (MRED), Chicagoland’s multiple listing service, has reported that the October 2012 Supply of Inventory (MSI) was down to 4.3 months, while the number of properties under contract had skyrocketed to 10,364.
The MSI figure is the lowest in the past five years, and the monthly under contract numbers are the highest ever, outside of April 2010 when impacted by the Homebuyer Tax Credit.
MRED October Market Stats – Time to Sell
We always hear about how “Now is the best time to buy!” These numbers seem to indicate that “Now may be the best time to sell!”
The MSI indicates how much time in months it would take, at the current rate of houses going under contract, to sell the residential inventory in MRED’s MLS database. It is a more effective metric with which to measure the amount of homes available for sale in a market than a gross number, especially when comparing to other areas. Similarly, the number of properties under contract is a good predictor of future closed activity.
MRED MSI Shows Market Heating Up
In October 2011, the MRED MSI was 12.0 months and the number of properties under contract was 5,818. In October 2010 those numbers were 16.6 months and 4,852 respectively. In layman’s terms, the market was quite cool before, but now it’s heating up. The number of properties under contract is double that of last year, which was up 20 percent from the year before that, 2010.
“The October MSI number is a clear indicator that there is pressure on prices to rise,” said MRED CEO Russ Bergeron. “It is a simple matter of Economics 101 – less supply, more demand and prices move up. This helps explain why the median sold price is up nearly 3 percent year-over-year. The number of properties under contract confirms what we have been observing – that the real estate marketplace is slowly returning to some form of normalcy. All else remaining equal, I look forward to terrific numbers in 2013.”