Are home buyers being priced out of the market?
The answer to this question depends a lot on where you live. All real estate is local. In many markets, homes have seen a 10+% increase in value in the last year. Many homeowners, in severely impacted markets, that were “under water” (meaning that they owed more than the home is worth) are seeing a return to having some equity in their homes.
Click here for an excellent article from “Money Talks News” about this very subject.
Here in my local market – which is mainly the inner-loop neighborhoods of Houston – the issue of inventory is causing more problems than pricing. We currently have approximately 2.6 months of inventory. This means that if no more homes came up for sale, then the current number of homes available would be sold out in 2.6 months. An inventory of six months is considered a stable market, meaning that the market is neither a “buyers market” or a “sellers market”. The average months inventory for the US is 3.5 months, so the lack of inventory is a nationwide issue.
Click here for the March 2014 real estate stats for Houston.
The good news for home sellers is that if you are considering selling your home, and if you don’t get greedy and you price it right, you will most likely get top dollar and possibly multiple offers.
The good news for home buyers is that interest rates are still historically low. The days of interest rates in the 3’s are gone, but even rates in the high 4’s is still considered excellent when compared to rates from the past (remember 19% anyone?).
The bad news for both buyers and sellers is the lack of inventory.
What are your thoughts?