The KCM Blog - Housing Inventory Making a Comeback

The shortage of homes for sale earlier in the year created an imbalance of supply to demand which resulted in double digit year-over-year price increases nationally. According to a recent Wall Street Journal article, the inventory of homes for sale is now beginning to reach more normal levels. The article reported:

“Housing inventories increased in August and stood just 2.5% below their levels of a year ago, offering the latest sign that more sellers are testing the market after swift home-price gains over the past year.

Nationally, there were 1.98 million homes listed for sale in August, according to a report released Thursday byRealtor.com. That was up by more than 24% from the low point in February and up 1% from July. Inventories have increased for six straight months.”

What about Home Prices?

This doesn’t mean prices will collapse. The inventory levels are still depressed, just improving. As the article mentions:

“While the overall level of homes for sale remains relatively depressed, the report suggests that inventory may have hit a bottom earlier this year after an extended two-year decline.”

However, as we mentioned last week, properly pricing your home in this market can be tricky. You should depend on the advice of your real estate agent.

 

August Market Report…the Perfect End of Summer Party Favo

By Marc Lebowitz, RCE, CAE Executive Director, Ada County Association of REALTORS® Single family home sales in August 2013 were 812 in Ada County, an increase of 12% compared to August 2012. Four months in a row above 800!!!  We sure haven’t seen that in a while.  Actually you have to go back to the summer of ’06. Year-to-date sales are 5,490; up 17% over 2012 YTD sales of 4,696.  NAR data says that for every home sold, $60,000 is added to the local economy.  Based on our sales volume, we have added $329 Million to our local economy so far this year. Dollar volume for August was up 28% to $193 million and YTD we are just over $1.2 billion in sales. Days on market averaged 46 in August, two days more than last month.  For the first six months the average was 52 DOM. New homes sold in August totaled 152, one more than the total new homes sold in August 2012. Historically, August sales increase 2% over July, but August 2013 sales decreased 8% compared to July 2013. Of the total sales in August, 11% were distressed; no change from last month. In August 2012, 21% of sales were distressed.  In August 2013 45% of distressed properties were REOs (40) and 55% were short sales (49). In August 2012 we experienced significant improvement in the health of distressed property sales – only 21% compared to 44% in 2011.  We are now seeing distressed properties reduced by almost half again. Pending sales at the end of August were 1,071; down 14% from July 2013. Of Pending sales in distress (12%), short sales outnumbered REO’s 2 to 1. At the end of August, we had 4% fewer sales pending than at the end of August 2012. This is the first time this year we’ve seen a decline in pendings relative to the previous year. This is a key number to monitor moving forward. August median home price was $201,992; up 12% from August 2012. For the first time since 2008, the medium home price has been over $200,000 for three consecutive months. According to NAR’s most recent report; national median price is $213,500.  We continue to outpace the national housing recovery. New Homes median price for August was $283,004; up 26% from August 2012. For Existing homes the increase is 12%. The number of houses available for sale at the end of August increased 4% from July 2013 to 2,456.  This is 14% more than last year at this time. Since January we have increased the number of single family homes for sale by 48%, allowing us to grow our YTD sales increase. Of the total active listings, 12% are distressed, down 2% from July. With inventory increasing and the percentage of distressed inventory decreasing, median home price will continue to strengthen well into the third quarter. Of our Distressed Inventory, 73% is Short Sales (207) and 27% is REO (76). Available inventory increased at all price points except in the <$120K range; which decreased by 14%. The price range adding the most homes to the market is $160,000 to $250,000, with an increase of 30 homes. In Ada County we now have 2.9 months of inventory on hand, up a little from the end of July. The price category in shortest supply is <$120K where we have 1.7 months. All price points up to $500,000 have a <4 month’s supply. We’ve left behind the Summer of ’13 and its highest sales and median prices of the year.  The question now is, as it was to Newton (“Laws of Motion”), how far into the future the momentum will carry us. Based on year-to-date performance, it’s likely we will finish the year with more than 8,000 total homes sold, which would represent an 11% increase is sales year over year. Median home prices will likely stabilize in the $195K to $200K price range for the fourth quarter.

 

Reasons to Sell NOW!

Thinking of Selling Your House? 5 Reasons to Do it Now Posted: 10 Sep 2013 04:00 AM PDT   Many now realize that it is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market. 1.) Demand Is High The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed a 17.2 percent increase in sales over July 2012; sales have remained above year-ago levels for 25 months. There are buyers out there right now and they are serious about purchasing. 2.) Supply Is Beginning to Increase Total housing inventory last month rose 5.6% to 2.28 million homes for sale. This represents a 5.1-month supply at the current sales pace, compared with 4.3 months in January. Many expect inventory to continue to rise as 3.2 million homeowners escaped the shackles of negative equity in the last 12 months and an additional 1.9 million are expected to enter positive equity in the next 12 months. Selling now while demand is high and before supply increases may garner you your best price. 3.) New Construction Is Coming Back Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers. 4.) Interest Rates Are Rising According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 4.57% which represents a jump of more than a full point since the beginning of the year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will continue to climb. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home. 5.) It’s Time to Move On with Your Life Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should? You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.

 

14,767 Houses Sold Yesterday! Did Yours?

There are some homeowners that have been waiting for months to get a price they hoped for when they originally listed their house for sale. The only thing they might want to consider is…

If it hasn’t sold in this hot market, maybe it’s not priced properly.

After all 14,767 houses sold yesterday, 14,767 will sell today and 14,767 will sell tomorrow. 14,767!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 17.2% over the year before. According to the report, annualized sales now stand at 5.39 million. Divide that number by 365 (days in a year) and we can see that, on average, almost 15,000 homes sell every day.

We realize that you want to get the fair market value for your home. However, if it hasn’t sold in today’s surging real estate market, perhaps you should reconsider your current asking price.

 

Fannie Mae's Crystal Ball