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!