Wait for it...Patience is Key
Now that we’ve settled into 2015, we are starting to get the first reading on how the year is shaping up for home buyers and sellers. One thing is clear: “Patience” may be the most important word of the year.
Last year ended with a lot of momentum, as the economy improved dramatically and more than 1 million jobs were created from November through January. This in turn fueled the demand for more housing. So it makes sense that people were flocking to real estate sites in January. According to data from comScore, unique visitors to real estate websites increased 24% from January 2014. Traffic to realtor.com was up even more.
Of course, most in the industry had expected as much, having forecast strong growth in home sales in 2015, because more households are forming and more first-time buyers are entering the market. To see that forecast become a reality, however, we need to see the supply of homes for sale grow as well––and that has not happened yet.
New construction in January did not increase and remained 40% beneath a typical levels for a strong, expanding economy. At the same time, existing-home inventories declined as well. An already tight market is getting tighter as demand continues to pick up, and as a result homes are on the market for fewer days and prices continue to go up.
This condition correlates exactly with what active shoppers are saying. 67% of a representative sample of January traffic to realtor.com said the primary obstacle to purchasing a home was their inability to find a home that met their living and/or budgetary needs.
Mortgage rates have been low for most of the past few months, but the Federal Reserve is widely expected to take steps in the near to mid-term future that will push them higher. When the Fed stops talking about “patience” in regard to the federal funds rate, it’s signaling that it will be taking action soon. When you see that word drop out of its language, we’re likely to see mortgage rates inch up. That’s bound to make would-be buyers eager to get started.
Real estate is very seasonal. In most markets, both search activity and inventory peak in the spring and summer—although there are notable exceptions. Especially in this tight-supply scenario, buyers in markets that normally see peak activity as early as March should start their search now and find an expert local broker to inform them on trends specific to their desired neighborhoods. Just don’t expect to find that perfect home immediately.
If you are in the market for a new house and would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you.
Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Lang Premier Properties. See what past clients have to say about Stephanie Lang. Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.