It's been an interesting week showing houses over $400,000 in Harrisonburg and Rockingham County.  Both of the following seem to be true:

• There are way too many homes for sale over $400K.
• There are way too few homes for sale over $400K.

OK --- so, why are there TOO MANY homes for sale over $400K?  If you compare the average number of $400K sales/month over the past year with the number of active listings, you'll find that it would take 25 months to sell all of the homes listed for sale over $400K.  Way TOO MANY homes, right?

But wait --- if there are soooooo many homes for sale, how are there also TOO FEW homes for sale over $400K?  Well, as I drove my clients through neighborhood after neighborhood, there were so many areas where there was not a single home for sale.  In fact, looking back two years, there were 125 homes for sale over $400K, but now there are only 81 homes for sale over $400K.  This 35% reduction in inventory significantly limits the homes from which a buyer can choose.

So, what happened?  I think many (many) sellers who wanted to sell their homes, and tried over the past year or two, have become discouraged and have taken their homes off the market.  They look at the oversupply (25 months) and figure they'll be better off just taking their home off the market.  Many sellers are out of the game!

And what is happening now?  Given limited inventory levels, (some) buyers aren't finding what they are looking for.  Frustrated by not finding a home that works well for them, buyers are also out of the game!
 
What a conundrum!