Changes are afoot on the national housing market that suggest that this year is going to increasingly favor the home seller. And that means buyers will likely be paying more for real estate in 2014.
According to a recent news article, the National Association of REALTORS® recently reported that nearly 5.1 million homes sold last year, which is the highest rate it’s been since 2006.
Meanwhile, values are rising as home sellers grow increasingly tired of selling their home for “cheap.”
Although this is resulting in longer Days on the Market averages, it also means that home prices are rising.
A Look Back at 2013 Activity
Here’s an overview of national real estate activity, according to December data:
- From January to December 2013, there were 4.87 existing home that were sold on a seasonally-adjusted annualized basis.
- That figure is one percent higher from the month before.
- For 2013 overall, there were 5.09 million home sales, which is a nine percent increase from the year before.
- What’s more, that figure is the highest reading it’s been since 2006.
- Meanwhile, home builders reported increased buyer foot traffic. In fact, they said the activity had reached a 7-year high.
- And by December 2013, the home supply was down to 4.6 months. This means that if activity stayed the same, all available homes for sale would be sold in that time frame.
- The latest report also revealed that homes are not selling as quickly as the year before.
- While 28 percent of homes sold in 30 days or less, the Median Days on the Market actually increased substantially, from 16 to 72 days.
- In fact, Days on the Market has been steadily increasing for the last seven months.
- Here’s another thing to note: home prices have increased more than 20 percent in some regional housing markets over the last year, in part because of bidding wars.
- In December, foreclosed homes had a median Days on Market of 67 days.
A Look Ahead to 2014
Experts predict that cold weather in December and January may have created even more pent-up home buyer demand, which could bode well for housing market activity in the coming months as temperatures warm up.
Experts are also saying that while home sales have slowed over the last several months, competition is greater than ever.
This is aided by the fact that home sellers are feeling more confident than ever. They’re no longer worried about whether their home will ever sell, they’re worried about getting the best price possible for their home.
Thus, many have raised their list prices to values that they think are reasonable instead of pricing them undervalue in an effort to attract buyers.
While this might slow the momentum a little (and thus lead to longer Days on the Market), the long-term effect will be that prices will rise as buyers realize this is not a passing trend.
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