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Housing Inventory Hits 30-Year Low
Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.
New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,
“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”
CoreLogic’s President & CEO, Frank Martell added,
“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.
While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”
Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.
Real estate is local.
Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.
What’s your home worth? Get your fast and free home value estimate now!
Bottom Line
Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, let’s get together to discuss the exact conditions in our area.
Buying Is Now 33.1% Cheaper Than Renting in the US
The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers actually show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!
Other interesting findings in the report include:
- Interest rates have remained low and, even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
- With rents & home values moving in tandem, shifts in the ‘rent vs. buy’ decision are largely driven by changes in mortgage interest rates.
- Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.
Bottom Line
Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to find your dream home.
Do You Know How Much Equity You Have in Your Home?
CoreLogic’s latest Equity Report revealed that 91,000 properties regained equity in the first quarter of 2017. This is great news for the country, as 48.2 million of all mortgaged properties are now in a positive equity situation.
Price Appreciation = Good News for Homeowners
Frank Nothaft, CoreLogic’s Chief Economist, explains:
“One million borrowers achieved positive equity over the last year, which means risk continues to steadily decline as a result of increasing home prices.”
Frank Martell, President and CEO of CoreLogic, believes this is a great sign for the market in 2017 as well, as he had this to say:
“Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”
This is great news for homeowners! But, do they realize that their equity position has changed?
According to the Fannie Mae’s Home Purchase Sentiment Index (HPSI), more homeowners are beginning to realize that they may have more equity than they first thought.
“This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy.”
78.8% of homeowners have significant equity (more than 20%) in their homes today!
This means that many Americans with a mortgage have an opportunity to take advantage of today’s seller’s market. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).
Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae spoke out on this issue:
“High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market. However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market…”
Bottom Line
If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2017! Check your homes worth – click here
Let’s get together to evaluate your situation!
The Housing Market Does Not Hibernate in Winter
The Housing Market Does Not Hibernate in Winter. Home sellers often opt to wait until spring to list their homes. The winter market is just as strong, however. This time of year is a great time to sell your home. Buyers who are out looking at homes in freezing temperatures are a different breed of buyer. Sellers also have an additional edge on the market this time of year; lesser inventory which brings more attention to their home. Buyers are not overwhelmed with too many choices when there is less inventory to choose from. Winter buyers are focused on the priorities that started their initial home search and are out looking with the need to buy with fewer distractions, finding a home is top priority.
Real Estate Inventory Is Fueled By Life Changes
Life circumstances change daily with the need to buy and sell real estate due to various reasons such as job relocation, getting married, divorced, up-sizing or downsizing. These are just a few of the circumstances that bring new buyers and sellers into the housing market every day, regardless of the market season. Which in turn brings new inventory and choices to the market.
Show Off
The holidays and winter months showcase areas of the home not always considered during the spring/summer months. The size and layout of space for holiday decorating and entertaining, guest spaces, how well insulated and warm a home feels when temperatures dip below freezing, gain importance. Buyers visiting homes in winter will spend more time inside the home admiring the features and amenities offered. A wood burning or pellet stove warming the house can be seen as energy efficiency savings. Buyers can feel the warmth and coziness of a fire roaring in a fire place.
It’s A Win Win
You should take advantage of the market you’re about to enter, preparation is key regardless of the time of year. Winter sales play a vital role for the upcoming spring market. Winter house sales that close after the New Year are the newest comps for your neighborhood. These sales will be used for valuing homes in the upcoming spring market. And finally, the winter months can provide a win-win for home sellers who are serious about selling and buyers who are serious about buying as it’s the most advantageous time to buy real estate.
Best Time To Sell
I’m often asked when is the best time to sell my house? Best time to list your home is ONLY when you’re ready regardless of the market season. If you’re not emotionally ready to sell your house and prepared getting it show ready then it’s not the right time for you. You’ll know you’re ready when the pro’s of selling outweigh the cons regardless of the time of year. Working with a local broker like myself who knows the market and inventory is able to provide you with a wealth of information for a successful home sale transaction.
