Spring has always been perceived as the start of the housing season, but this March in some neighborhoods in the city and some suburbs possessed a whole new kind of March-madness. Homes sales all around were up from a year ago in nearly all areas of the city but they could likely have gone higher. Some areas saw a slow down since January of this year. The market is different and as the lack of inventory in the conventional market continues to raise prices and create multiple offers, which seems to be creating the need again for new construction.
Chief economist for the National Association of Realtors, Lawrence Yun said, "Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels. Most local home builders are small businesses and simply don't have access to capital on Wall Street. Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market."
Inventories are obviously quite low in the market, but builders on the other hand are struggling with labor and land shortages, and also higher material costs.
Yun seems to think that the market is leveling off and will continue to move at a slower pace for a while. He noticed that there has been a sudden surge of mortgage application though, conveniently as the interest rate dropped as a result of the crisis in Cyprus.
Bob Walters, chief economist for Quicken Loans says that the movement in applications is only a small piece of the big picture, but the surge is a good indication of more buyers entering the market to take advantage of the low interest rates. Even though rates will be increasing, they are still low and the timing is ripe to buy.