My colleagues and I are getting concerned about the homeowners who have planted themselves for more than eleven years in their current home instead of moving forward to their next residence. The Real Estate market is moving, and here are some of the reasons why.
According to the Daily Real Estate News, more homes are predicted to be sold this year that have been sold in the past ten years.
Home sales are expected to increase about 3.5 percent to 5.64 million. By 2018, existing-home sales will likely rise another 2.8 percent to 5.8 million, (according to the National Association of REALTORS®).
What are the reasons for this rise?
- 16 Million new jobs were created since 2010
- Pent-up household formation and
- An increase in consumer confidence.
How can we accommodate this new demand?
New-home sales are expected to rise 10.7 percent this year to 620,000 and are expected to tick up another 8 percent in 2018 to 670,000 sales.
However, buyers are likely to face higher prices on homes. Prices are expected to increase 5 percent in 2017 and another 3.5 percent in 2018.
Where is our inventory?
Homes sold quickly in the first quarter of 2017 —causing prices to rise even higher than predicted in many parts of the nation.
“Prices are increasing faster than we expected them to because of the continual shortage of new homes coming onto the market,” says Senior Economist Joseph Kirchner of Realtor.com. “People who had been holding back on buying a home … now have good, steady jobs and are less worried about losing their jobs and hence are going into the housing market.”
“Prospective buyers poured into the market,” NAR’s Chief Economist Lawrence Yun said in a statement. “Those able to successfully buy most likely had to outbid others—especially for those in the starter-home market.”
The biggest challenge to today’s housing market is the shortage of housing inventory for sale. A normal market would see a six-month supply of homes for sale. Currently, that number is below four months. This is the major reason home prices have continued to appreciate at higher levels than historic averages.
There is only 2.4 months of single-family inventory in Cooper City which is a decrease of 11% from last month.
There is only 4.7 months of single-family inventory in Davie, which is an increase of 20% from last month.
NAHB Chief Economist Robert Dietz about the reason for the increase in confidence amongst builders.
“The HMI (Housing Market Index) measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market. Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward.”
The Wall Street Journal stated that home builders are beginning to shift their focus away from luxury homes and toward homes at lower price points to cater to this growing millennial population.
You may want to consider a valuation of your current home. If you are a renter sitting on the fence, it may be time for you to consider buying NOW.