February 2016 saw the the 48th consecutive month with year-over-year home price gains with median home prices up 4.4% versus February 2015. By the same token, with housing inventory in many parts of the country at below historic levels, sales in February 2016 slowed by 1.1% compared with February 2015. Sales of distressed properties were down to 10% as compared with February 2015. The impact of this low inventory (we should call it thinventory) is that 35% of homes sold in February 2016 in less than one month.
The Charlotte region's inventory in February 2016 was even lower than the national supply of homes at only 2.8 months, down from 4.3 months in February 2015, putting pressure on home prices in the region. As for distressed property sales, the Charlotte regions's percentage of such sales versus the total was 4%, less than half that of the national average.
What This Means For Home Buyers Going Forward Into The Spring 2016 Housing Market:
- The supply of homes available to buy remains very tight (and getting tighter). Those that are on the market are selling more quickly with minimal negotiating room.
- In prime neighborhoods, many homes are going into contract within days of listing. Home buyers will continue to have fewer options to choose from and will need to make decisions and offers more quickly than ever.
- With many homes receiving multiple offers, buyers will also need to make "clean" offers with a minimum of contingencies.
- Buyers should be prepared to pay more for a home and to expect to negotiate less off the asking price. Depending where home buyers are shopping, they might not be able to negotiate at all and should expect to see bidding wars and often to write multiple offers before finally going into contract.
- With decreasing inventory, increasing prices, decreasing affordability, a strong argument can be made that home buyers should be making purchase decisions sooner rather than later in 2016.
What This Means Home Sellers Going Forward Into The Spring 2016 Housing Market:
- Homes priced right, staged right, and marketed right, it will sell and, on average, should sell quickly.
- With foot traffic in February 2016 significantly outpacing the previous six months, homes should continue to sell more quickly as buyer demand is there.
- Home sellers need to be prepared to move quickly and to have a back-up plan for a new residence at the ready.
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