at every home, today’s market is benefiting sellers
The National Association of Realtors recently reported something
that has been quite apparent as of late. The low inventory, which we
reported in a past blog, is causing properties to fly off the
market especially in areas such as Boston where demand for property
and the range of buyers remain strong. This has led many to
question whether we are still in a so-called buyers market. The
economic recession and housing downturn caused many to believe this
were the case as both home sales and prices crashed. However, here
on our local level, this has certainly changed.
NAR shared that for January of 2013, the number of homes
throughout the country fell by 4.9% to 1.74 million. It had not
been since 1999 when a number even close to this figure was the
status quo, as back then there were just 1.71 million homes on the
market. This is quite a serious drop in the available inventory
when you consider that just two years ago during this time there
were 2.91 million properties available nationwide.
With the economy turning around, the job market improving, and
overall confidence amongst the populace growing, the pool of
prospective buyers has skyrocketed. It is their desire to purchase
property that still has not reached a peak in terms of value
combined with the consensus that real estate is once again proving
to be a trustworthy long-term investment. If this trend of
additional buyers grows while inventory is to remain roughly at its
level, then with the current accelerated pace of sales, it would
only take 4.2 months to sell the total supply of properties on the
market today. Astonishingly enough, in just one year this estimated
time span is down a great deal from the 6.2 months it would have
taken to sell the former inventory back at this same time last
year.
While inventory levels tend to increase in the Spring, it
nonetheless is likely to be a Spring market with less choice for
buyers than in years past. This is only a good thing for sellers.
In a past blog we
discussed how properties average days on the market have
decreased and many are selling for at or even above their
original asking price. Goldman Sachs are even predicting that home
sales could rise to 5.2 million units this year, a boost of 12%
over 2012s numbers. So with less inventory yet greater sales
projections, it is evident that properties are no longer sitting on
the market and receiving zero interest. In fact, investors are also
being aggressive lately and have been buying up properties that are
selling for less than their replacement cost. Furthermore,
household formation is improving which suggests a rising demand to
continue in the coming years. This, along with the record-low
mortgage rates and home prices still at a respectable level all
depict this as a wonderful time to be a seller full of confidence
knowing that buyers are abundant.
More Information: The Wall Street
Journal