Buyer Confidence up

All the Realtors I talk to--myself included--are pretty happy with the general look of the real estate market right now. We’re in a completely different position than this time last year, with solid price increases, steady inventory and a building demand as we move into our “season”. So 2014--bring it on! National data in October reflects a positive adjustment in inventory of approximately 1 percent compared to previous months. After six months of steady improvement, housing supplies are now just 1.51 percent lower than they were one year ago, which signals a greater balance between demand and supply. As a seller, you may feel a little confused. Are you in a seller's market or a buyer's market? The quick answer is we are moving away from the buyer’s market of the last several years and moving closer to a seller’s market. A buyer's market simply means that conditions are favorable to homebuyers. High inventories of homes for sale, falling prices, and seller concessions are characteristic. A seller's market favors the seller with rising prices, quick sales and eager buyers paying close to or above asking prices with few requests for discounts or better terms. My office--just to discuss a topic I am conversant with--is promoting a number of higher end new construction properties. Starting new homes is something that requires confidence in the housing demand and the local economy. It doesn’t hurt to have deepish pockets on the part of the builders and willingness to invest the resources into the development of new homes--which may take a year to close (and therefore a year to get paid). And of course, high-earning buyers have rebounded more quickly from the recession than entry-level buyers. This, in turn, has prompted more home builders to go upscale to match the shift. Still, builder and buyer confidence is a function of national numbers. U.S. home prices in October were relatively unaffected by inventory supply shortages. Most notably, the median age of inventory – which in other words would be called Days On Market and which is a leading indicator of demand – has improved (is lower by) more than 12% over last year, demonstrating resilience to seasonal changes and stabilized inventory. This suggests that properties continue to turn over quickly in contrast to the usual patterns, despite increasing prices and stabilizing inventory. Nationally, list prices are 7.57 percent higher than where they were one year ago. So higher prices + faster sales = a better market. National Association of Realtors Chief Economist Lawrence Yun says, “We expect rising home price conditions to continue through the balance of the year.” Of course you have heard me on Local and Regional data verses National data. Remember, all business is done locally. Unlike the “’49ers” who went west when gold was discovered, I can’t sell houses in Utah just because the market there may be going great guns. I work here, live here and focus on things here. And comparing local real estate sales with national sales is really no different than comparing our weather with the national weather. Except for June, July and August I’ll take the Suncoast. Dane Hahn is a real estate professional serving the Suncoast of Florida, you can reach him at 941-681-0312 or by email at dane.Hahn@gmail.com. See him on the web at www.danesellsflorida.com