Supply and Demand

Any economics student can tell you that two factors drive the price of just about any product - Supply (how much of something is available for sale), and Demand (how much of it people want to buy). When Supply goes down, prices usually go up. And when Supply goes up, prices usually come down.

Looking at the supply of homes currently available for sale in Holbrook, we see that Supply has come down considerably from the record highs of the past couple of years. On February 1, there were 50 single-family homes listed for sale in Holbrook in the Multiple Listing Service. While that may sound like a large number, there were 69 homes for sale on the same date in 2007, and 63 in 2006. In other words, the supply of homes is considerably smaller today than it has been in recent years.

Does that mean prices will begin rising soon? Not necessarily. Supply is only half the equation. And the current supply is still far above what we saw in 2004 and 2005, when prices were soaring. (On February 1, 2005, there were only 23 single-family homes listed for sale in Holbrook, and on February 1, 2004, the number was 16!) But it does suggest that the local real estate market may be closer to "balancing out" between buyers and sellers, which would result in prices beginning to stabilize instead of continuing to drop each year.