Real Estate Outlook: Shrinking days on the market, Seller AdvantageSeptember 24, 2012
The National Association of Realtors recently adjusted the way it measures the time it takes a home to sell and due to shrinking markets across the country. Currently, the rate shows that the market is balanced. In July, the median time on the market was 69 days. This is down 29.6% from July last year. The median measure shows that one third of homes sold faster and one third slower, depending on a number of other factors. Chief Economist for NAR, Lawrence Yun, explained the relationship between inventory, supply, and time on the market in this statement, “As inventory has tightened, homes have been selling more quickly. A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country. This equilibrium is supporting sustained price growth, and homes that are correctly priced tend to sell quickly, while those that aren’t often languish on the market.”
It is very apparent to all in the industry that the inventory nationally, and within Fort Lauderdale, is low and this is causing an increase on the prices homes are selling for. NAR estimates that prices will continue to increase by 4.5 to 5% this year, and 5% in 2013. At this rate there will be a highly constrained inventory. Luckily, builder confidence is high and new construction is picking up. Yun expanded on this situation further, “Ironically, if housing construction doesn’t pick up to normal levels within two years, supply shortages could be sustained for an extended period and lead to above average appreciation. Therefore, any unnecessary hindrance to housing starts, such as excessive local zoning regulations or stringent bank capital rules for construction loans should be carefully reexamined.” While it is too soon to tell if banks across South Florida and Nationally will reduce the amount of money down for a loan, it would not be surprising to see. If you are looking to buy, now is the time, since prices are expected to rise, and if you are looking to sell, it is also an excellent time. For more information on buying and seller representation, please contact either Peter Barkin or Mark Gilman today!