Fewer homes available for sale limits choices
March and April are normally the beginning of the year's most active home-buying period. But this year, buyers face a serious dilemma.
Not enough homes are on the market to satisfy the demand. This opens the door to bidding wars and rising prices in some cases. A major real estate organization recently issued a report on the situation:
"As the home-shopping season approaches, lack of inventory continues to limit choices available to potential buyers, putting a strain on markets across the country."
Home shoppers had 8.6 percent fewer homes to choose from than they did last year, according to the January Zillow Real Estate Market Reports. Housing starts reached a three-month low in January, indicating that newly built homes will not be a significant benefit for buyers, either.
An increased number of bidding is predicted, according to the Zillow report.
"A restricted supply of homes for sale will mean increased competition for homes that are available, and bidding wars that can price out entry-level or first-time buyers. Low inventory, along with a strong job market, has been driving up home prices, especially on the West Coast.
"Across the country, only a quarter of markets saw inventory increase over the past year. Among the largest metros in the U.S., Atlanta saw the largest increase in available homes for sale - 6.8 percent. Home shoppers in San Diego have significantly fewer options - inventory there has dropped 30 percent."
Q. Is home flipping phasing out?
A. In many markets, flipping is increasing. This is the practice of buying existing homes for quick resale at a profit.
RealtyTrac, a source for housing data, released its Year-End Home Flipping Report, which shows that 179,778 U.S. single-family homes and condos were flipped in 2015, 5.5 percent of all single-family home and condo sales during the year.
"The 5.5 percent share of U.S. home flips in 2015 was up from a 5.3 percent share in 2014, marking the first annual increase in the share of homes flipped following four consecutive years of decreases. The share of homes flipped in 2015 increased from the previous year in 83 of 110 U.S. metropolitan statistical areas nationwide analyzed for the report (75 percent).
"For the report, a home flip is defined as a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data collected by RealtyTrac in more than 950 counties, accounting for more than 80 percent of the U.S. population."
Q. When is the best time to list a home for sale?
A. One recent study reveals the best window to sell homes faster and for the highest price is in early May, according to updated Zillow data. The firm issued a news release:
"Determining the right time to put a home on the market often tops the list of concerns for sellers - as it should, since timing can influence the final sale price of each home significantly, according to new data from Zillow.
"The firm has found that, nationally, homes sold in late spring (May 1 through May 15), sell around 18.5 days faster and for 1 percent more than the average listing. The optimal listing window has shifted since Zillow's first report. When Zillow conducted this analysis previously, there were 9 percent more homes on the market, and homes listed between mid-March and mid-April sold fastest and for the highest price."
Q. Are mortgage applications increasing?
A. At last report, applications were on the rise. Mortgage applications increased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey.
"The refinance share of mortgage activity decreased to 56.7 percent of total applications from 58.6 percent the previous week. The adjustable-rate mortgage share of activity decreased to 5.2 percent of total applications," it was reported by MBA.
"The FHA share of total applications remained unchanged at 12.0 percent from the week prior. The VA share of total applications increased to 12.6 percent from 12.1 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior."
• Email Jim Woodard at storyjim@aol.com.
© 2016, Creators Syndicate