Prices moving up, inventory tight.

Rod Sager

Our local market is reflecting upward trending prices and tight inventory. For buyers this means it is time to jump off the fence and into the market before your home buying dollars are squeezed too tight. For sellers, the time to list could be right now. There is no way to determine how long this upward pricing will continue. We could see extended growth over several years or we could see a top out and flat line next year. There are too many external factors that effect the real estate market to make an absolute assertion. What we do know is that right now we have low prices that are quickly rising and we have very low interest rates. This is a golden moment in real estate where a buyer can lock in a low interest rate for 30 years and take advantage of robust market appreciation. Below are some excerpts from a recent article posted by the National Association of Realtors®.

"WASHINGTON (June 20, 2013) – Existing-home sales improved in May and remain solidly above a year ago, while the median price continued to rise by double-digit rates from a year earlier, according to the National Association of Realtors®."

"Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 4.2 percent to a seasonally adjusted annual rate of 5.18 million in May from 4.97 million in April, and is 12.9 percent above the 4.59 million-unit pace in May 2012."

"Lawrence Yun, NAR chief economist, said the recovery is strengthening and to expect limited housing supplies for the balance of the year in much of the country. “The housing numbers are overwhelmingly positive. However, the number of available homes is unlikely to grow, despite a nice gain in May, unless new home construction ramps up quickly by an additional 50 percent,” he said. “The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth.”"

"Existing-home sales are at the highest level since November 2009 when the market jumped to 5.44 million as buyers took advantage of tax stimulus. Sales have stayed above year-ago levels for 23 months, while the national median price shows 15 consecutive months of year-over-year increases".

"NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said market conditions today are vastly different than during the housing boom. “The boom period was marked by easy credit and overbuilding, but today we have tight mortgage credit and widespread shortages of homes for sale,” he said.“The issue now is pent-up demand and strong growth in the number of households, with buyer traffic 29 percent above a year ago, coinciding with several years of inadequate housing construction. These conditions are contributing to sustainable price growth,” Thomas said."

"Forty-five percent of all homes sold in May were on the market for less than a month. The median time on the market is the shortest since monthly tracking began in May 2011; on an annual basis, a separate NAR survey of home buyers and sellers shows the shortest selling time was 4 weeks in both 2004 and 2005."

"Single-family home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.60 million in May from 4.38 million in April, and are 12.7 percent higher than the 4.08 million-unit pace in May 2012. The median existing single-family home price was $208,700 in May, up 15.8 percent above a year ago, the strongest increase since October 2005 when it jumped 16.9 percent from a year earlier."

"Existing-home sales in the West increased 2.5 percent to a pace of 1.23 million in May and are 7.0 percent above a year ago. With the tightest regional supply, the median price in the West was $276,400, up 19.9 percent from May 2012."