3/26/2015 03:26:00 PM
George Lawson
The price of any item is determined by the supply of that item, and the market demand. The National Association of Realtors (NAR) released their latest Existing Home Sales Report this week.
Inventory Levels & Demand
Amidst reporting on the fact that sales of existing homes rose 1.2% from January, and outpaced year-over-year figures for the fifth consecutive month, was the news that total unsold housing inventory is at 4.6-month supply.This is down 0.5% from last February and remains below the 6 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 under 4%, new programs available for down payments as low as 3%, and you have an attractive market for buyers. Not surprisingly, buyer demand for housing remains twice as high as this time last year.
Prices Rising
February marked the 36th consecutive month of year-over-year price gains as the median price of existing homes sold rose to $202,600 (up 7.5% from 2014).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:
"Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices. Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before (interest) rates rise."
Bottom Line
If you are debating putting your home on the market this year, now may be the time. The amount of buyers ready and willing to make a purchase is at the highest level in years. And, if you're considering buying a home in the near future, now is also the best time before prices rise due to shrinking inventory. Be sure to contact a local professional in your area (I happen to know a good one!) to get the process started.(Source: KeepingCurrentMatters.com)
Want to see all the homes currently listed for sale? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You can always call us for a FREE home buying or selling consultation at (951) 990-9492 to answer any of your real estate questions.
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