Friday, May 25, 2012
Seller’s Market Returning?
For the past few years, many folks have delayed purchases of their next home because they've had a tough time selling their current one. But those days may be nearing an end.
The National Association of Realtors has reported that inventory—the number of homes for sale across the U.S. has declined to a 6.6 month supply. That's down from 9.1 months in April 2011.
We’ve also seen a similar reduction in my neck of the woods. In my real estate area in Cumberland County, Tennessee, inventory now stands at 5.93 months, and in my smaller resort community, it’s 5.4 months.
As well, existing home sales in April rose to 4.62 million from 4.48 million in March, nationwide. And new home sales increased to 343 thousand from 328 thousand in that same time period.
Part of the reason for the improvement is that the economy is steadily getting better, relieving a lot of stress from would-be real estate buyers. Unemployment claims continue to decline—from their peak of 659,000 in March, 2009 to 370,000 last week. And interest rates continue to drop, allowing buyers to purchase homes at very low rates. Freddie Mac announced this morning that 30-year mortgage rates have declined to 3.78%, their lowest levels since the 1950's!
The result of all these statistics is that we are entering a very unique time period in real estate—a cycle when buyers can still purchase homes at reasonable prices and low rates, and when sellers have a larger pool of buyers who are willing and able to buy their homes now—not two years into the future.
If you look at Case-Shiller’s Composite 20 Home Price Index, you can see that housing prices appear to be bottoming out. Calculated on a scale using 100 as the base, prices in the top 20 metro areas, as of February 2012 (the latest data) were 136.71. That compares to a level of 201.05 in May, 2007. And the National Association of Realtors, in an April survey, noted that multiple offers are beginning to pop up across the country. That means that the window is beginning to close on bargain-basement priced homes.
So, if you've been sitting on the fence—as a buyer or seller—now may be the time to climb down and grab your opportunities during this rare cycle that can benefit both buyers and sellers.
Rates are low and credit is becoming easier. For the latest in mortgage rates, you can go to Mortgage Rates Credit Cards Refinance Home CD Rates by Bankrate.com, fill in the particulars, and you can see just how much your potential mortgage payment will be.
And if you’re just beginning your search for a new home, Find Real Estate, Homes for Sale & Houses for Rent on REALTOR.com - Realtor.com® can save you gasoline and time. More than 91% of buyers begin their search on the Internet, according to the National Association of Realtors. It’s an easy way to winnow down your search and save you some legwork!