For the very first time in eight years, the general U.S. real-estate market is experiencing a rare balance between home buyer demand and home seller supply, according to the latest “Current Market Conditions” quarterly survey.
Only 45% of respondents reported more buyers than sellers, compared to a 61%-39% ratio half a year ago. Thirty-one percent reported more sellers than buyers; the rest of the 24% said their markets are almost evenly divided. In the South, the Midwest, the Northeast and in California, the buyer-seller ratio closely matches the national figures.
National survey results from Durham Region real estate agents in 47 states mirrors the most recent monthly sales activity reported by the National Association of Realtors (NAR), which estimated the nation’s supply of unsold homes available at 5.3 months for both January and February. An inventory of 5.5 to 6.0 months is considered a balanced market between buyers and sellers.
“The last time we experienced a balanced housing market was in January, 1998, once we had a 6.4 month supply of unsold homes,” said Walt Molony, a NAR spokesperson. “The record for the best inventory was in January of 2005, once we reported a 3.7 month supply.”
You will find exceptions to the most recent balanced housing market reports – most notably in lots of Western States and Alaska, where buyers still outnumber sellers by a considerable margin – but overall results indicate an orderly transition to more normal housing markets. This seems to be the beginning of the’soft landing’many economists are predicting for homes for sales and certainly good news for both consumers and Realtors after five years of market imbalance.
The National survey in the first quarter of 2006 also found:
o It’s taking longer to sell a property in many markets, and the trend is up. Fifty-five percent of respondents said it’s now taking a lot more than 60 days, an average of, from listing to sale. 3 months ago, only 30% said it absolutely was taking a lot more than 60 days.
o Seventy-five percent of sellers continue to be getting at least 95% of their asking prices. Only seven percent say they are still getting a lot more than 100%.
o Home appreciation before 12 months is holding firm at about 10%. The trend is moving toward single-digit appreciation, however. Fifty-four percent reported five percent or less, 20% said five to 10%, and 26% said 10% or more.
o Eighty-one percent reported a great supply of unsold homes in nearly all selling prices, with inventories steadily growing.
o Multiple offers dropped from 70% this past year to 39% in the first quarter of 2006 as demand for unsold homes decreased in lots of markets.
o Move-up and repeat buyers outnumber first-time buyers by a two-to-one margin in many elements of the country. The margin is three-to-one margin in California and the South. The national two-to-one ratio has remained constant before three to five years despite rapid run-ups in home appreciation.
Thomas M. Stevens, NAR president, noted: “Housing is merely returning to a standard market. We’re still seeing double digit annual price gains but we ought to get down seriously to single digit appreciation fairly soon.” Nationally, sales of existing homes rose in February carrying out a five-month decline. The national median home price for several housing types was $209,000 in February, up 10.6% from $189,000 a year ago.
Current Market Conditions responses closely reflect local economic news and population growth.
As an example, Neil Kalinski of Diamond GMAC, exclusive agent for Tempe, AZ, said move-up buyers are driving his market. Median home price is $260,000, up 25-30% before year. He reports more buyers than sellers in this growing suburban Phoenix community and home campus for Arizona State University. Time in the marketplace is 30 days or less, with sellers usually getting 100% or more of asking prices. “Overall, our market has slowed somewhat. Prices are starting to level off, that ought to be great for both buyers and sellers.”
Helena Talbot of Talbot and Company, exclusive agent for Leesburg, Sterling, Ashburn and Dulles, VA, reported more sellers than buyers and a median price of $400,000. Average time in the marketplace from listing to contract is 90-120 days. Most sellers are receiving at least 95% of asking prices. “Our greatest activity is coming from move-up buyers,” Talbot said. “Average price appreciation is up 10% to 15% before year.”
Saralou Durham of RE/MAX Preferred Group, exclusive agent for Montgomery, Anderson Township, Hyde Park and Mt. Adams in the Cincinnati metro area in Ohio, reported a 50-50 market between buyers and sellers. Average time in the marketplace is 60-90 days. Sellers are receiving at least 95% of asking prices, she said. Median home prices range from $181,750 to $397,500. “Exciting changes continue in Mt. Adams, meeting the wants of both young professionals and empty nesters.” She stressed the proximity to downtown business and shopping and the quality of schools.” Durham added: “Demand for new homes is really strong that vacant lots are now being purchased and old homes are now being torn down seriously to rebuild new ones.”