Are homes sales collapsing? If one were to read certain headlines in recent days, it would be easy to assume that home sales are collapsing all around us and that the housing industry is once again in jeopardy. And in truth, January 2015 was somewhat slower than previous moths in terms of home sales, but January 2015 home sales were still higher when compared with the same period last year without even taking seasonality into account. See the article below from Keeping Current Matter's blog explaining why maybe we are seeing a premature case of "chicken little" playing out in the reporting of January 2015 home sales.
With home sales up 3.2%, with buyer activity three times greater than last year, and housing inventory still under 5 months it would seem that the real estate markets overall continues to be healthy. (And in the Charlotte, North Carolina metro area, new construction is going and selling gangbusters!)
THE STATE OF THE CURRENT HOUSING MARKET ACCORDING TO KEEPING CURRENT MATTERS (KCM):
The National Association of REALTORS (NAR) just released their Existing Home Sales report and some have taken the results and ran with headlines like:
“Existing home sales collapse in January despite low mortgage rates”.
Let’s take a closer look at what the report really shows. There is a seasonality to home sales that happens every year, with a decline in January, (as shown in the graph below.) But in reality 200,000 more homes (3.2%) sold this January over last January.
The demand for housing hasn’t been a challenge.
Current buyer demand, as shown in the graph below, is actually 3x greater than that of January 2014.
NAR’s Chief Economist, Lawrence Yun points to the real issue at hand:
“Realtors® are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
Even though buyers are out looking for their dream home, they cannot find it! Inventory levels increased slightly since December, but are still below historic norms and unable to keep up with the elevated demand.
Bottom Line
If your plan for 2015 includes selling your house, waiting till the Spring may not be in your best interest. Meet with a local real estate professional in your market who can explain the opportunities available now.
Clearly, one month's home sales activity does not a trend make and home sales are not yet collapsing as some would have us believe.
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