Home Prices on the Rise

by on September 21, 2012

It is so funny to read this. I have been working with buyers for 2 years who experienced a lack of inventory, especially under $500,000 which severely hampered their ability to purchase a home. I can think of at least a 1/2 dozen people who dropped out of the market as a result of this. Now, the newspapers are finally acknowledging this trend.

At the marketing meeting yesterday we looked at the little community of Willow Glen yesterday. This week there were approximately 75 homes for sale in the community. Last year, the same week, there were over 170 home available for sale. That is quite a drop off of inventory. And, with record low interest rates for the foreseeable future, there is NO shortage of demand.

  • The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported Monday that its statewide inventory of unsold homes index for existing, single-family detached homes fell to 3.2 months in August from 3.5 months in July and 5.2 months in August 2011.
  • The index reflects the number of months needed to sell the supply of homes on the market at the current sales rate.  A six- to seven-month supply is considered normal.  When the number goes higher, inventory is plentiful and it’s considered a buyer’s market.  When the number goes lower, the advantage goes to the seller.
  • Declining inventory helps explain why the statewide median price of an existing, single-family detached home rose to $343,820 in August, up 3 percent from July and up 15.5 percent from August 2011, according to C.A.R.
  • Nationwide, the inventory of homes for sale also has declined.  In July, there was a 6.4-month supply of homes compared with 9.3 months in July 2011.  The current number is in line with the long-term average, according to the NATIONAL ASSOCIATION OF REALTORS®.  However, NAR also acknowledges there are “acute shortages” in places such as California, Arizona, Nevada, and parts of Florida.
  • Also constraining supply is the fact that so many homeowners are underwater – or owe more than their homes are worth – and unable to sell without taking a loss.  As prices rise, more homes will increase in value, but it’s going to take time.  Meanwhile, there are still a lot of homes that are not likely to come onto the market.
  • At some point, the balance will tip, but it’s hard to predict when.  When banks decide prices are high enough, they will start unloading houses they have been sitting on, according to the chief economist for Trulia.

What does this mean for you? If you have a home you are thinking of selling, Now is the TIME! If you are out there looking for a wonderful home to live in you may want to change your search criteria so that you are not in such heavy competition with others.

Call me today to find out how I can help you sort out the best way to take your next step on the path to home ownership or listing your property for the best price possible to capitalize on this wonderful opportunity at 408-890-6126.

Be Sociable, Share!

Previous post:

Next post: