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Monday, February 8, 2016

The Surprising Level of Homes For Sale....

Sometimes there just isn't any explanation to it. The ebbs and flows of our housing/real estate market used to have a pattern. Got busy in late March or April, slowed a bit in July, spurted in mid September until Halloween and then dormant until January.  Not this year. I'd like to explain activity in the market as a result of a mild winter but I'm not sure that's it. The last 21 days of buyer behavior have been extremely aggressive most pointedly towards homes on the market that were priced correctly.  Couple that with a much lower inventory of available properties and you have at least a temporary seller's market. It could be more than temporary and here's why. 

Even though the Fed raised the discount rate .25 points in December (read 1/4 point), home mortgage rates are actually down since January 1st. That varies on the type of mortgage and your credit score but the rates are universally down some extent. So why?  We'll get back to that. The overshadowing issue is a lack of supply right now. On February 1 of 2014 there were 616 Carmel homes on the market. On 2/1/15 there were 551. On the first day of February of THIS year there were a scant 498 properties available. There are a thousand theories on this but it really doesn't matter why. It only matters that there is a supply deficit.  

What does it mean for consumers?  I'm going to say something I never say. I don't like saying it...check that...I HATE saying it but if you are considering putting your home on the market in the Spring, don't wait. Now may truly be the time.  Yes...I'm grimacing as I say it but now is s a great time to sell your home ( time can I just have a tooth pulled?).  I don't like saying it because it seems self serving to the real estate community and we don't get or keep credibility by being self serving. Having said that...the truth is the truth and on the bubble sellers need to get off the bubble and on the market.

Why? 10th grade economics. Not enough supply and buyers who are out in droves based on the mild winter, current lower home mortgage rates and the fear of more Fed action to raise rates as the year goes by.  The time is now home sellers and it may not be better in the Spring if the pattern of past Presidential Election years holds true.  Presidential elections have always produced a slower market pattern as the year goes on. 

If you're hesitating, don't. If you have things to do to get ready, do them. I understand the timing may be personally perfect for you but if it's worth 5% in value return, is it worth it? Probably. Nobody thinks of housing like a stock but they should. Homes go up and down in value all the time but we don't know or think about it because we're not selling. Well the housing stock market is up right now and deft consumers will be taking advantage in the weeks to come.