Is There a Window of Opportunity for Sellers Right Now?
KCM Posted: 25 Feb 2013 04:00 AM PST
One of the most interesting revelations of the latest National Association of Realtors (NAR) Existing Home Sales Report is the shortage of housing inventory being reported throughout much of the country. At the same time, buyer demand is dramatically up over last year. Here are some key points:
Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace.
This represents the lowest housing supply since April 2005 when it was also 4.2 months.
Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply.
Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.
What Does This Mean if You Are Selling a Home?
The price of anything is determined by supply and demand. According to NAR’s report, inventory is at its lowest level since the real estate boom eight years ago. At the same time, demand is up. Lawrence Yun, NAR chief economist, reveals:
“Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”
Does that mean you should sell your house now? Or should you wait to see if prices increase? Nobody knows for sure. However, some feel that there may be a pent-up inventory about to come to the market because, as prices increase, it will free up some sellers who have been locked in a negative equity situation (where the house is worth less than the remaining mortgage).
And if you are planning to trade up:
by The KCM Crew on February 12, 2013 · 3 comments
Ski In Ski OutA recent survey showed that 3 out of 4 future home buyers (who are not first time buyers) plan to move up to some form of a ‘better’ home. The breakdown:
Move to a significantly bigger home (49%)
Move to a nicer home (17.5%)
Move to a nicer part of town (8.6%)
If you or your family falls into any one of these categories, you should strongly consider making the move sooner than later. The ‘cost’ of your new dream house will be determined by two factors: the price of the house and the mortgage interest rate. Both are projected to increase this year.
Prices Set to Increase
In the recent Home Price Expectation Survey, 105 leading housing analysts called for a 3.1% increase in home values by the end of 2013.
Mortgage Interest Rates Projected to Increase
According to the Mortgage Bankers Association, after reaching record lows in 2012, the 30 year mortgage rates are expected to creep up slowly in 2013 to 4.4%.
Now is a great time to buy the home you always dreamt of owning. However, the longer you wait, the more it will cost.
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