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    Inadequate Inventory Driving Prices Up

    The latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed a direct correlation between a lack of inventory and rising prices.

    We are all familiar with the concept of supply and demand. As the demand for an item increases the supply of that same item goes down, driving prices up.

    Year-over-year inventory levels have dropped each of the last 18 months, as inventory now stands at a 4.0-month supply, well below the 6.0-month supply needed for a ‘normal’ market.

    The median price of homes sold in November (the latest data available) was $234,900, up 6.8% from last year and marking the 57th consecutive month with year-over-year gains.

    NAR’s Chief Economist, Lawrence Yun had this to say:

    “Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country.”

    But there is good news about rising prices. More and more homeowners are recovering from a negative equity situation and learning that they are able to sell their homes and either move up to their dream home or downsize to a property that will better suit their needs. Look for these homes to come to market soon.

    Bottom Line

    Buyer demand continues to outpace the supply of homes for sale. Listing your home in the winter attracts serious buyers who are looking to close the transaction quickly.

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    Danny Cheung

    I spent almost thirty (30) years with the Department of Defense in hardware/software design, development, operations, maintenance, and program manager before joining the Group in a full-time capacity. I am thrilled to put my years of experience as an Electronics Engineer and Program Manager to assist and lead our Real Estate Group to the next level. I am committed to establishing the tools and resources necessary for our team members to work more seamlessly and effectively, thus ensuring our clients' satisfaction. My wife and I have two daughters and a dog (he’s more like our son). I enjoy traveling and watching sports, especially football…Go Skins!

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