In the last few months home prices continued to appreciate which helped home sales to increase but at the same time prices increased. You’d think that more inventory would slow down prices but demand is so strong and inventory still so low that prices still shot up.
According to the National Association of Realtors existing home sales rose 4.2% for a rate of over 5 million homes per year. This is almost 13% higher than we were just one year ago. This is the highest level in over 3 years and shows the housing market is continuing it’s recovery. Need more proof? We’re now looking at 15 months in a row of price increases. Wow!
Sales have been down but not for lack of demand but for lack of inventory. More homes are now coming to market helping to bring a least a little sanity to the market. Here in Atlanta we’ve been seeing inventory at a 2 to 3 months supply. Great for sellers but it leads to a crazy stressful market where emotion can take over. It looks like we may be moving more to a 3 to 4 month supply which makes for a healthier market.
But what about those investors? They’re actually slowing their purchases due to higher prices in some areas. The number of homes investors bought shrunk from 22% in April to 20% in May but that hasn’t seemed to slow the market at all as owner/occupants easily filled that gap. It’s a trend we’ll continue to see through 2013. First time home buyers are still strong, buying over a third of all homes sold.
So what does this mean for you? We’re going to see tight inventory levels for the foreseeable future. At the same time mortgage interest rates are moving up sharply. (more on that later this week). Both of those factors can mean buying a home for you is getting more expensive. We’ve been telling you for a year now, the time to move is now. You haven’t missed the boat yet but barring some significant change that boa may sail soon. If you’re thinking of buying or selling give us a call today.