Are Home Sales Collapsing?

It is very common in January for home sales to decline.  Here in Ohio, it is partially due to that hibernation season of frigid temps and snowfall.  This last year I had a bunch of stuff closing in December.  Then in January - poof.  It's normal.  This is the time of year that Realtors take the time to go through their closets, spend time with their kids and maybe even go on vacation.

So it doesn't help when the National Association of Realtors comes out with statements like this:

"Existing home sales collapse in January despite low mortgage rates."

Which of course sends the public into a tizzy.  But, slow down there, because I have some information that tells a better story!

Existing home sales were UP in January by 200,000 sales.  Look at the way the graph rises and falls.  There are normal dips and rises.  But this year, look at how home sales are up from last year!

Another gain from last year, buyer demand is up!  According to the research, buyer activity is up 3 times more than January 2014.  3 times!  The demand for housing is there.

So, why are we still seeing things like this?

NAR's Cheif Economist, Lawrence Yun points to the real issue at hand:

"Realtors are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions."

What does that mean?  Remember the first economics lesson many of us learned about?  Real Estate is all about supply and demand!  Right now demand is high.  There are buyers who want to take advantage of the low mortgage rates and get into their new home.  The issue is that they can't find it!

Housing inventory looks at how many homes are available in a certain area.  We call this available inventory.  Right now, inventory is low.  Buyers are looking in areas and not finding anything but homes that have been languishing on the market.  How do we meet this discordance of supply and demand - we need more listings to go out.  If you are waiting for whatever reason to list your home in the Spring, think of the advantage you might have to listing it right now.  Lower inventory means less competition.  Get your product out there priced right and you are likely to find that eager buyer looking for their dream home.

What are you waiting for?  Spring?  I think for all of us, warmer weather would be a nice change, but in the real estate market, the time is now!

What a difference 1.5% can make!

Did you know that mortgage interest rates are still at historically low rates?  The forecasters last year kept predicting that interest rates would rise in 2015, but so far, as of mid February, that hasn't proved to be true.  Lenders are still reporting locking in low rates, and right now, they are seeing a spike in refinancing as well.  If you are still paying a 6% or higher interest rate, look and see what refinancing could do for you!  My favorite lender today said she was able to help a family get their mortgage payment down, AND they will be able to pay it off in just 10 years.  

So, what difference does a lower interest rate really make to a new buyer?  Would you believe with only a 1.5% reduction in interest rate, it might be an extra bedroom or a finished basement?  A house with upgrades versus one stuck in a previous decade?  When my husband and I were looking, we found a huge difference in houses at different approximate price points.  With interest rates this low, many people are finding the home they never imagined they could buy.    

Check out the charts below to see the difference.  Pay attention to the diagonal line in the middle.  Similar payments for each.  Different interest rates.  And a whole different price range.  In my market, those little dips in interest rates make a huge difference!

  

2014 - Real Estate in Review

2014 was a great year in Real Estate.  Personally, I had my most successful year yet, and more than doubled my sales from the year prior.  I met wonderful new clients and closed my last sale on December 29th.  No holiday slump for this Realtor!  

Yesterday I received the Summit County Market Update.  They show changes from December 2013 to December 2014, and analyze the whole year in review.  Please see the graph below, but let me share some observations.

• New listings - Up 3.9% from 2013
• Days on Market - Down 11% from 2013
• Closed Sales - Up 4.5% from 2013

    

More listings, more sales, less time on the market - all good signs of a recovery.  

Days on Market is an indicator of how quickly a home sold.  In my experience there are several reasons why you see fewer days on market.  Good, fair pricing, and low inventory.  Right now, the inventory is low.  That means that buyers have fewer choices when looking at homes.  Fewer choices mean that buyers will frequently choose one of those homes available - which is good for sellers!

  

There is the update, and I hope to have plenty more to share as the year goes on.  January was slow, but things are picking back up.  I am ready for all that 2015 will bring.  Ready to buy or sell?  Call me!