The housing crisis is finally in the rearview mirror as the real
estate market moves down the road to a complete recovery. Home values are up,
home sales are up, and distressed sales (foreclosures & short sales) are at
their lowest mark in over 8 years. This has been, and will continue to be, a
great year for real estate.
However, there is one thing that may cause the industry to tap
the brakes: a lack of housing inventory. According to the National
Association of Realtors (NAR), buyer
traffic and demand continues to be the strongest it has been in years. The
supply of homes for sale has not kept up with this demand and has driven prices
up in many areas as buyers compete for their dream home.
Traditionally, the winter months create a natural slowdown in
the market. Jonathan Smoke, Chief Economist at realtor.com, points to low interest rates as one of the many reasons why buyers
are still out in force looking for a home of their own.
“Overall, the
fundamental trends we have been seeing all year remain solidly in place as we
enter the traditionally slower sales season, and pent-up demand remains
substantial as buyers seek to get a home under contract while rates remain so
low.”
NAR’s
Chief Economist, Lawrence
Yun, points out that the inventory shortage we are currently experiencing isn’t
a new challenge by any means:
"Inventory has
been extremely tight all year and is unlikely to improve now that the seasonal
decline in listings is about to kick in. Unfortunately, there won't be much
relief from new home construction, which continues to be grossly inadequate in
relation to demand."
Bottom Line
Healthy labor markets and job growth have created more and more
buyers who are not just ready and willing to buy but are also able to. If you
are debating whether or not to put your home on the market this year, now is
the time to take advantage of the demand in the market.
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