A new report from Trulia suggests that falling home inventory levels are strongly correlated to the length of time on the market and have possibly led to an effect of “hurried buying.” Trulia’s quarterly Inventory and Price Watch, which looks at the nation’s 100 largest metros, found that inventory levels fell 8.9% over the past year and are now 20% lower than they were 5 years ago. In addition, they say more first-time buyers have been pushed out of the market due to upward pricing pressure from a lack of inventory – which in itself, correlates to fewer homes on the market as the pool shrinks. Interestingly, they report that in 2012, 57% of homes were still on the market after two months, however today it now 47%.
“Markets that have witnessed larger decreases in inventory have experienced larger declines in the share of homes still sitting on the market after two months. With these declines, falling inventory has also pushed affordability of homes across all segments to new post-recession lows.” Said Ralph McLaughlin, Trulia’s chief economist.