The Real Estate Market Is Booming

REAL ESTATE UPDATE:  Inventory is low and demand is high which is resulting in multiple offers, quicker sales, and increased values with greater appreciation.

Buyers are out there!!!  

Homes are selling quickly with increased offers because there isn’t enough inventory to choose from, which in turn, is increasing home values...because price is determined by supply and demand.

Agents don’t have enough homes to show their buyers and are blanketing neighborhoods to try and obtain more listings. Last year this time, just in Syosset alone, there were about 140 homes available on the market for sale, now there are 84 – that’s a huge difference!

However, as we enter into the "SPRING" market and more homes come on the market, many will continue to go quickly with buyer confidence up and the threat of % rates rising...and they will start to climb.

• Supply – The monthly supply of houses for sale is at its lowest point which creates more demand.
• Demand – The demand is high because there are many buyers out there very serious about purchasing a home now but there is not enough inventory to choose from which, in turn, drives up the prices creating bidding wars with multiple offers.
• Appreciation – with the high demand there comes higher home prices which helps the homes appreciation value. (as some people may consider an equity loan if not selling).
• New Construction - As the market is recovering, more and more builders are coming back aggressively stronger.
• Interest Rates - The Mortgage Bankers’ Association (MBA) has projected mortgage interest rates will inch up approximately one full point in 2013.
• Bank Timelines Shorter – Currently Bank mortgages are funding quicker because of the fewer transactions at this time for timelier turnarounds.

 According to NAR’s report, with inventory is at its lowest level since the real estate boom eight years ago, Lawrence Yun, NAR chief economist,

“Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”

One of the most interesting revelations of the latest National Association of Realtors (NAR) Existing Home Sales Report is the shortage of housing inventory being reported throughout much of the country. At the same time, buyer demand is dramatically up over last year.  

As per Frank Nothaft, Freddie Mac vice president and chief economist,

“Across the nation, most local housing markets have room for sustainable growth, particularly in home construction and sales. As the broader economy heals, expect to see more good news with house prices continuing their recent upward trend, and home sales and housing starts continuing to post strong growth rates.”

The report, also, offered projections on sales and prices.

Housing Starts and Sales

Projecting housing starts in 2013 will increase to 950,000 units or about 22 percent higher than 2012 levels.

Existing home sales are expected to pick-up as the house price recovery allows homeowners who have been forced on the sidelines by negative equity to get back into the market.                                                         

House Prices

While most metro areas saw substantial run-ups in prices during the boom, well above income growth, the subsequent market correction was in many cases more severe.

The level of affordability in most markets suggests a continued improvement in home prices, and strong growth in sales and construction.

It seems Freddie Mac is also optimistic about the future of real estate in the U.S.

Capital Economics Revises Home Price Forecast Upward

Strong demand and tight inventory have brought existing home sales back to "normal" levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to "loosen the purse strings slightly" and lend a little more freely. These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5 percent price gain this year up to 8 percent. Next year's projection is a smaller 4 percent gain. » Read More

Should you wait to sell with the hope prices will go up next year or so, then you run the risk of the % rates also going up for a buyer who maybe can’t afford a higher priced home because of a higher % rate - something to consider....just do whatever is right for you to live your life.

 Just know that now IS a Great time to sell!