More La Jolla Home Sellers Testing the Waters
A sure sign that the housing market is beginning to recover is that more sellers are willing to test the waters. The number of homes that are listed for sale in the United States rose approximately eight percent in April, according to industry reports. In addition, the number of days that homes were on the market dropped to 32 days, down from 48 days a year ago. Does this mean we are in a seller’s market?
Sellers Feeling Optimistic
With the market experiencing sales prices that are close to list prices, list prices inching higher and higher, and houses staying on the market for only a short period of time before they are sold has encouraged many more sellers to list their homes. This is a significant turnaround from just a few years ago, when many sellers feared their homes would languish on the market, or that they would have to sell for much lower than their asking price.
Inventory of homes for sale is at its lowest level since December of 1999. This number has dropped over 25 percent from this time last year. There are approximately 1.74 million homes on the market today. If the current pace of sales keeps up, this supply will be exhausted in a little over four months. This is the lowest housing supply since April of 2005. A “normal” supply is considered to be around six months.
More Buyers than Sellers
The number of potential home buyers continues to rise, while the number of sellers is holding somewhat steady. There are about 40 percent more buyers in the market compared to a year ago, which has increased demand substantially. With a dearth of inventory, many experts believe we are heading into a seller’s market in much of the US.
This lack of inventory is driving home prices up. The median national home price is approximately $173,000, up over 12 percent from last year. Conventional sales are up 29 percent year over year (this excludes sales of distressed properties).
With such high demand, the length of time that homes stay on the market is shrinking. In some of the hottest markets in the nation, brokers have reported bidding wars. This is especially true in areas such as Phoenix, Miami, and Silicon Valley.
More Homes Expected to Come to Market
As prices continue to rise, experts suspect that more sellers will be lured to the market. More sellers have confidence that the worst of the crisis is behind us, and are more willing to make big decisions and life changes.
In addition, more homeowners are being pulled out of negative equity because of rising home prices, which will have positive effects on the market. This will help to ease inventory constraints and perhaps mediate price increases in some areas. Nevertheless, there are still many homeowners who are still underwater, owing more on their home than it is worth. Experts agree that the market still has a long way to go before recovery is felt across the board, and predict that negative equity will continue to influence the market for the near future.