Friday, February 22, 2013

Seller’s Market Developing in Much of the U.S.

Existing-home sales edged up in January, while a seller’s market is developing and home prices continue to rise steadily above year-ago levels, according to the National Association of REALTORS®. Sales rose in every region but the West, which is the region most constrained by limited inventory.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.4 percent to a seasonally adjusted annual rate of 4.92 million in January from a downwardly revised 4.90 million in December, and are 9.1 percent above the 4.51 million-unit pace in January 2012.
Lawrence Yun, NAR chief economist, said tight inventory is a major factor in the market. “Buyer traffic is continuing to pick up, while seller traffic is holding steady,” he said. “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.”
Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace, down from 4.5 months in December, and is the lowest housing supply since April 2005 when it was also 4.2 months.
Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply. Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.
“We expect a seasonal rise of inventory this spring, but it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth,” Yun explained.
The national median existing-home price for all housing types was $173,600 in January, up 12.3 percent from January 2012, which is the 11thconsecutive month of year-over-year price increases; that last occurred from July 2005 to May 2006. The January gain is the strongest since November 2005 when it was 12.9 percent above a year earlier.
Distressed homes — foreclosures and short sales — accounted for 23 percent of January sales, down from 24 percent in December and 35 percent in January 2012. Fourteen percent of January sales were foreclosures and 9 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in January, while short sales were discounted 12 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.41 percent in January from a record low 3.35 percent in December; it was 3.92 percent in January 2012.
See the rest of the article at: Seller’s Market Developing in Much of the U.S.

Saturday, February 16, 2013

Salem MA Real Estate Market Update

February 16, 2013 - Like most other cities and towns on the north shore of Massachusetts, Salem's real estate market is strong with the average single family home selling for 10.8% higher today than it did a year ago. The average single family home price that sold during the last 6 months was $297,006.

There are more homes selling, also. In the last six months 105 single family homes have sold in Salem, compared with the same period last year where only 71 homes sold. This is an increase of almost 48% in the number homes sold in Salem, MA.

Though not as strong as the single family homes, condominiums in Salem have seen a 22% increase in the number of units sold and only a 2% increase in price. The reason may be a lack of inventory for potential condo buyers to choose from. Last year there were 112 condos on the market, while currently there are only 87. In a "normal" market there should be around 130-150 units for sale during this time of year.

Overall, the demand for homes is greater than the number of homes that are for sale in Salem, and has been for at least a year. If this continues I would be surprised to see this change from a neutral market to a seller's market as home buyers try to cash in on the low mortgage interest rates and before they are priced out of the market. - Jim Armstrong