A RISING TIDE LIFTS ALL SHIPS…
The market continues to look strong overall, with inventory rising slightly and bringing some slight relief to buyers who are having a hard time finding what they want. Demand continues to be strong and while property values continue to increase, appraisals may be holding back a stronger market. Let’s look at the details….
DEMAND: Market demand continues to struggle when compared to last years numbers. Last year was like a release valve was let out of the market – many people just made the decision that things weren’t going to improve much in the next few years, at least to make a difference, and they bit the proverbial bullet and made the move, even though it may have been painful. This year in 2014, the pressure has been relieved and, while there are still folks wanting to make a move, the hard thing they are running into is the lack of great choices. Many buyers say to me “If I find the right place” and right now, there aren’t an abundance of “right places” in the market. We are even calling whole neighborhoods to see if we can shake the tree and find someone who wants to sell for our buyer clients. It’s not an easy market for buyers.
SUPPLY & INVENTORY ACCUM: In addition, the typical Spring Inventory Bump has happened. 1123 homes were added to the market last month and already 600 of those are gone. For those buyers that are figuring they will wait for this spring inventory bump, all we can say is… well, it’s happened. Has it made a difference in your search? Did you find the right home? If not, then it may very well be that what you are looking for either doesn’t exist or it doesn’t exist in your price range. We always tell buyers that if you want to wait longer for the “right house” to come along, just know that statistically you are only going to see more of what is currently on the market. Of course, if what you are looking for is very unique, it’s just going to take time. Bottom line is that the inventory still does not favor buyers and be prepared to make some adjustments to what you want to buy.
SOLD TO LIST RATIO: This ratio continues to hover around 95%. I believe that appraisals have a big effect on this, based on my recent experience. Many clients are experiencing appraisal issues where the home does not appraise for the agreed upon sale price. Appraisers are put into some really tough positions because their assessment of value is based on what happened in the last 6 months or so. At this point in the “season”, many comps they are looking at are as far back as the fall and if prices are heading up, as they are, then they have a hard time justifying any increase in price. It’s quite possible that if we looked at what many buyers originally agreed to pay for the homes, that we would see a higher ratio, perhaps as much as 1%-2%.
CONCLUSION: While the inventory shortage has eased slightly, buyers still find it very tough to find what they want, quickly. It’s also very likely that they are paying list price or something very close to it. The good news is that if you are considering selling or own your own home, that your value is continuing to head up. Just about all indicators are pointing to a continued recovery but one that is not out of control. The key figures to continue to watch are interest rates, the list to sale ratio and the months of supply of inventory. Until next month, choose to make it a beautiful day!
Want to see updated graphs like in previous months? Email us and let us know you miss them! We want to be good stewards of our time and depending on the demand, we may leave the other graphs out. . .
