2013 Spring Home Buying Season

Spring time is the season for selling houses. April, May, June and July account for more than 40% of all housing transactions annually, and this is all due to the weather condition - according to Forbes. 

Here's what you need to know about the market before you hunt for homes:

1. Inventory Shortages

The available homes have gone record lows, thanks to both an abnormally small supply of existing homes for sale. The low inventories are helping push home prices to increase.  Stuart Hoffman, Chief Economist at PNC Financial Services Group suspects that more home will come to market as the home prices increase - showing prospective sellers confidence in the housing market.

Traditionally this time of the year shows a sharp increase in home inventory levels as the sellers list their homes in time for the buying season. According to NAR economist Lawrence Yun, more homes are expected to go on the market by May - ahead of the summer buying season.  However, other economists suspect inventory levels will remain low throughout the rest of this year. A six-month supply is considered healthy, but there are only 4.7 month supply of existing homes are available on the market. That's nearly 20% less than last year - on national level.

The limited supply of available homes is pushing up the home values.  Nationwide, the median price for a home resale has increased to $184,300 in March, up by 11.8% from last year.  The highest increase since November 2005.  

2. Increased Competition

In some areas, buyers make an offer above the asking price. Some buyers have different tactics so that the sellers would choose them over other buyers. 

Buyers should be prepared to move fast if they find a property that they would like to buy.  Otherwise, other buyers would beat them to it.  Some may need to bid on multiple homes because many will be outbid by others.

3. Cash is King

Sellers still prefer all-cash buyers that can be closed quickly.  According to NAR, about 30% of home sales are all-cash.  To compete with cash buyers, buyers MUST get a pre-approval before they search for a home. 

Unlike the past several years, inventory is at record lows, home prices are increasing. Statistics show that Americans are gaining back confidence on the housing market. Buyers are willing to invest again!  While the news looks promising to sellers, many buyers will be faced with several obstacles in buying their house as compared to previous years.

If you want to buy or sell your home, NOW is the time to join the bandwagon. For any questions, do not hesitate to contact me.