- - Thursday, April 12, 2012

Whether you’re buying a home, selling one or hoping to do both, you will be better prepared if you know a little about the market’s current supply and demand.

A seller needs to know how much inventory (supply of homes for sale) there is. This gives you a sense of how much competition you face from other sellers. If you also know something about current home sales, you’ll understand how much demand there is for your home.

Buyers will benefit from a look at the same data. Unlike sellers, they are hoping to find a lot of supply and limited demand. That combination keeps prices low and lets a buyer take time to make a decision.

The market has been fairly balanced during the past few years. That’s the kind of market move-up buyers especially want to see, rather than a strong seller’s or buyer’s market.

In a seller’s market it is easy to sell your home, but harder to buy your next one. In a buyer’s market, it can take a long time to sell - but the purchase is relatively easy.

The Washington area experienced a very strong seller’s market from 2002 to 2005, and a strong buyer’s market in 2007 and 2008.

Since then, we’ve seen falling inventory and rising sales - the combination sellers want to see. It’s also the combination that was needed to stabilize home prices, which fell because of a vast oversupply of unsold homes.

Today’s charts show inventory and sales figures for the month of February over the past five years.

Each jurisdiction in the area has had a unique experience since 2008. But, if you look first at the inventory charts on top, you generally will see a drop in the stock of unsold homes.

Next, look at the sales chart, where you will find the opposite pattern. In Prince George’s County, especially, February’s sales have risen steadily year after year.

Barring another huge wave of foreclosure properties coming the on the market, 2012 looks like it could be the best year for home sellers since 2005, without being too difficult for buyers.

Send email to csicks@gmail.com.

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