Increase in the Supply of Homes for Sale – March 2013

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Existing home sales rose modestly in February and more people listed homes for sale, the first sign of a potential turnaround in a supply crunch in some markets.

Home sales rose 0.8 percent in February from January to a seasonally adjusted annual rate of 4.98 million, 10.2 percent above last year’s level, the National Association of Realtors said Thursday.

The sales rate was the highest since November 2009, when a federal tax credit propped up home sales.

A more important number in the report may be the supply of homes for sale. That rose to 4.7 months, at the current pace of sales, up from 4.3 months in January, NAR says.

The increase in supply is the first of any real significance for more than two years, says Paul Diggle, economist for Capital Economics. While too soon to say that the trough in supply is past, “We get the sense that it’s close,” he says.

Historically, Realtors have considered a six-month supply to be balanced between buyers and sellers.

Even if the inventory crunch is on the verge of easing, “it’ll be years, not months,” to get it back to more normal levels, says Jed Kolko, chief economist for real estate website Trulia. That’s because inventory is so low and new home construction, while picking up, hasn’t yet caught up to the pace of new household formation.

February’s uptick in supply “may be the first hint of a trend or it may be a blip,” Kolko says.

Much of the increase in total inventory, up almost 10 percent to 1.94 million homes, was seasonal, says Patrick Newport, economist at IHS Global Insight. Typically, inventory rises about 6 percent in February.

Even with the increase, February’s inventory of single-family homes for sale was at an 18-year low, he says.

The low inventories are adding up to rising prices, multiple offers and a slowdown in sales in some markets.

In February, California’s single-family home sales were down almost 6 percent from a year earlier, in part because of listing shortages, the California Association of Realtors says. California’s supply of single-family homes for sale stood at 3.6 months in February.

In parts of the Silicon Valley and San Francisco, more homes are selling even before they hit the multiple listing service, says Rick Turley, president of Coldwell Banker in the San Francisco Bay Area.

He estimates that off-market sales are running at 25 percent or more in Palo Alto and Menlo Park. Without such tight inventories of homes for sale, they’d be 2 percent to 4 percent of sales, he says. Multiple offers are also common.

Copyright USA TODAY 2013

 

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JDRF This year my company, Florida’s Best Realty Services,  has chosen to support a very special organization: JDRF. As the leading global organization focused on type 1 diabetes (T1D) research, JDRF raises vital funds that accelerate progress to bring life-changing therapies and a cure to people with this disease.

Type 1 diabetes is an autoimmune disease that strikes both children and adults at any age. Unrelated to diet or lifestyle, T1D causes lifelong dependence on injected or pumped insulin and carries the constant threat of devastating complications.

As part of my company’s participation, I’ll be taking part in the JDRF Walk to Cure Diabetes along with some my colleagues.  We all agree that JDRF is a superior charity doing unparalleled work and is extremely worthy of our time and support.

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Why Home Prices are Rising

Right now, listings are here today, closed before tomorrow.

Investors and regular folks can’t get houses fast enough. New, resale and distressed homes are here in the morning, gone by the afternoon, especially in busy South Florida. Literally. We’re seeing it first hand.

Want to sell your home in South Florida? Now is the time. This is your textbook definition of “seller’s market”.

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Many cities throughout the country are facing housing shortages due to the fact that there is little to no investment in residential projects. No one wants to invest where the return will be so little. Residential investors are holding out for increased market prices, while the ecstatic demand of any and all available houses – old, new, distressed – is driving prices up.

Economists theorize that the housing market is held back by: 1. developers that are stuck due to lack of funding/land and 2. Potential sellers who are stuck in mortgages.

First time home buyers are not interested in foreclosure-related homes, which are now at their lowest level in four years, so investors continue to pick them up in bulk. There’s high, high demand from “organic” prospective homeowners who are seeking nice houses to move into. Home prices are responding to the increased demand nationwide.

If you’re ready to sell, don’t hesitate to contact Florida’s Best Realty. We’ll make sure you get into the market the right way and reap the rewards!

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