The Putnam County housing market finished the 2016 year strong, with sales continuing to rise even while inventory tightened.

Sales. Putnam sales were up again in the fourth quarter, with single-family home closings up almost 10% from last year and now up almost 21% for the year. The market is just sizzling, with transactions up in 10 straight quarters and 18 out of the last 19.

Prices. Even with demand up, though, pricing is surprisingly stubborn. Single-family home prices were down across the board, falling 3% on average and almost 1% in the median and price-per-square foot. For the year, though, prices were up almost 2% on average, 6% at the median, and 10% in the price-per-square foot.

Inventory. Inventory continued to tighten, falling over 43%, now down to 5.05 months of inventory, which is below the six-month mark that usually denotes a tightening seller’s market. With inventory this low, we are likely to see some upward pressure on pricing going into 2017.

Negotiability. The negotiability indicators showed that sellers continue to gain leverage with buyers, with the listing retention rate rising to 96.6% and the days-on-market falling by 16 days for single-family homes. We would expect homes to continue to sell more quickly and for closer to the asking price if the market heats up.

Condos. The condo market was strikingly weak, with sales down 25% and prices down almost 13% for the quarter. The Putnam condo market is a very thin market, with only a few dozen sales per quarter, so we should be careful about drawing conclusions. For the year, sales were up 6%, but prices did show some sustained weakness, down 12% on average and 11% at the median.

Going forward, we do believe that the fundamentals of the market are strong prices at attractive levels, interest rates still near historic lows, and a gradually improving economy. Accordingly, we believe that tightening inventory, coupled with resilient demand, will drive meaningful price appreciation in 2017.

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