The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure.
Only those homes priced under $100,000 showed a decline (-4.6%). The decline in this price range points to the lower inventory of distressed properties available for sale and speaks to the strength of the market.
Every other category showed a minimum increase of at least 4.6%, with sales in the $250,000- $500,000 range up 15.2%!
Here is the breakdown:
What does that mean to you if you are selling?
Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, let’s meet up to see if it is priced appropriately to compete in today’s market.
|With the overall economy just inching along, some experts are questioning whether the housing market can continue its momentum throughout the rest of the year. People are beginning to ask questions such as:
Freddie Mac, in their April Economic Outlook, addresses the disappointing economic news and what impact they think it will have on housing:
What about real estate?
Freddie Mac was much more optimistic about housing…
They went on to conclude:
IS STUDENT DEBT STANDING IN THE WAY OF HOMEOWNERSHIP?
Student loan balances have doubled since 2007 to well over $1 trillion. Meanwhile, millennials are taking much longer than previous generations to buy their first home. A recent study examined whether student loan debt is preventing young adults from purchasing homes*.
Surprisingly, the study concluded that there is no causal relationship between student debt and delayed homeownership. In fact, debtors in their late 20s were more likely to own a home than non-debtors. The study gives several alternative explanations for why millennials are delaying their first home purchase when compared to prior generations. Mainly, the delay in homeownership seems to be part of a larger trend of delaying the period of life known as “transition to adulthood”. For example, the share of 18-34 year-olds who are married with children has also fallen from 27% in 2000 to 20% in 2015.
The study did find one major correlation between student loans and delayed homeownership: student loan debtors who dropped out of college did have much lower rates of homeownership vs. student loan debtors who graduated from college.
Moral of the story? If you’re going to take out student loans, it’s better to graduate from college with a degree that leads to a high-paying job.
*Jason Houle and Lonnie Berger. 2015 “Is Student Loan Debt Discouraging Home Buying Among Young Adults?”89:589-621, Social Service Review
|With home prices expected to appreciate by over 5% this year, some are beginning to worry about a new housing bubble forming. Warren Buffet addressed this issue last week in an article by Fortune Magazine. He simply explained:
Later, when questioned whether real estate and/or mortgaging could present the same challenges for the economy as they did in 2008, Buffet said:
What factors are driving home prices up?
It is easily explained by the theory of supply and demand. There is a lack of housing inventory for sale while demand for that inventory is very strong. According to a recent survey of agents by the National Association of Realtors (NAR), buyer traffic was seen as either “strong” or “very strong” in 44 of the 50 states (the exceptions being: Alaska, Wyoming, North Dakota, West Virginia, Connecticut and Delaware).
Also, in NAR’s latest Pending Home Sales Report, it was revealed that the index was the highest it has been in a year.
What does the future bring?
As prices rise, more families will have increased equity in their homes which will enable them to put their home on the market. As more listings come to market, price increases should slow to more normal levels.
Anand Nallathambi, President & CEO of CoreLogic, recently addressed the issue:
|The Gallup organization recently released a survey in which Americans were asked to rank what they considered to be the “best long term investment.” Real estate ranked number one, with 35% of those surveyed saying it was a better long term investment than stocks & mutual funds, gold, savings accounts or bonds.
Here is the breakdown:
The survey revealed that real estate was the number one choice among each of the following groups:
Even stock investors ranked real estate number one. According to the report:
The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report, which revealed that homes were on the market for an average of 47 days in March. This is a decrease from the 59 days reported in February, as well as the 52 days reported back in March 2015.
42% of homes across the country were on the market for less than a month, which is the highest it’s been since July 2015 (43%)!
Among the states with homes selling in 30 days or less are Washington, Oregon, and Minnesota. The map below was created using results from NAR’s Monthly Realtor Confidence Survey.
Buyer demand is increasing as the inventory of homes available for sale remains low. If you are thinking about listing your home for sale this year, let’s meet up so I can help you take advantage of current market conditions!
The price of any item is determined by the supply of that item, and the market demand. The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report which gives insight into today’s market conditions.
Inventory Levels & Demand
Sales of existing homes rose 5.1% month-over-month in March and are 1.5% higher than this time last year. Sales rose in all four major regions in March.
Total unsold housing inventory is 1.5% lower than March 2015 at a 4.5-month supply and remains well below the six months that is needed for a historically normal market.
Consumer confidence is at the highest level in over a decade. Pair that with interest rates still below 4%, programs available for down payments as low as 3%, and you have an attractive market for buyers.
Homes sold in March were on the market for an average of 47 days and 42% of properties sold in less than a month.
March marked the 49th consecutive month of year-over-year price gains as the median price of existing homes sold rose to $210,700 (up 5.7% from 2015).
So What Does This Mean?
The chart below shows the impact that inventory levels have on home prices.
NAR’s Chief Economist, Lawrence Yun gave some insight into the correlation:
If you are debating putting your home on the market in 2016, now may be the time. The number of buyers ready and willing to make a purchase is at the highest level in years. Let’s meet up so we can get the process started.