Home Market 2016

 February 2016

Good news for home sellers! Prices have risen by 4% in 2015 and 6% in 2014 and are projected to grow by at least 3% in 2016. This steady growth and a more stabilized market follows several years of ups and downs.  Overall home sales are up 11% over a year ago and continue to maintain positive growth according to the National Association of Realtors.

In year-to-year comparisons, home sales increased across all regions and all price categories. Regionally, the Northeast takes the lead in home sales growth, up 21% from January 2015, but only a modest 0.9% median price increase. The Midwest follows close behind with an 18% increase in existing home sales over last year and prices up almost 9%. The West comes in with an 8% percent increase and the South with 6% over last year.

Despite the improvements in housing market indicators, many remain cautious as we enter the spring selling season due to ongoing supply constraints.  According to the latest reports, total housing inventory at the end of January increased 3% to 1.82 million existing homes available for sale, and that is 2% lower than a year ago. Unsold inventory is at a four-month supply but a six month supply is typically considered the ideal balance between supply and demand.

Buyer Strategy

Due to the short supply, Realtor.com suggests home buyers start looking early and are prepared to act quickly once they find their perfect home.  85% of prospective buyers say they will purchase in the spring or summer of 2016. This means buyers who start looking before spring may get the home they want at a better price.  Realtor.com also recommends that buyers take a look at new homes if they are having trouble finding what they want in the resale market. New home sales are expected to increase even though new home starts are still slow due to a lack of buildable lots, skilled labor and construction loans, which continue to hold builders back.

A new article from Fox Business News also indicates that a number of first time buyers are ready to jump into the mix and bolster sales. 

Seller Strategy

Over the past few years, many potential sellers waited for the market to trend up before listing their homes. While many of those homeowners may now be ready to sell, they can’t or won’t sell until they find their next home. Again, the short supply is limiting their options and many simply have nowhere to go.  With home equities on the rise and fewer home owners “underwater” on their mortgages, many of these owners are opting to remodel rather than move. This trend is evidenced by the rise in home improvement sales. Home Improvement Research Institute predicts overall spending on home improvement products will increase 4% in 2016.

For those owners who do decide to sell, the key is to price the home right from the outset.  According to Redfin research, overpricing your home will be costly in the long run. A brand new listing gets four times more online “hits” in the first week than it does a month later.   When sellers drop a price late in the game, they have already lost the interest of many potential buyers. 

But even if a home is listed at the right price, it has to be ready for buyers to visit. Homes that are too cluttered, in need of serious repair, or in poor locations may continue to languish.  According to the Washington Post, you should give your home a thorough cleaning and take care of neglected home improvements like peeling paint and leaky faucets. Sellers should address the exterior of a home as well as the interior because buyers often judge a home based on their very first impressions. 

2016 selling season is here! Let Caring Transitions help prepare your home for market! We are the nation’s largest and most trusted resource for downsizing, decluttering, estate sale and online auction!

By Nan Hayes for Caring Transitions

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