So the market’s recovering, interest rates are low, and you think you’re finally ready to buy a home? Not so fast. Buyers across the country are running into a new roadblock: there don’t seem to be enough homes for sale.
Anyone who has looked at entry- to mid-level homes for sale in Bainbridge Island probably knows what I mean. Mortgage rates remain near historic lows, and as the prices of homes for sale continue to rise, fears that we could soon see a repetition of a real estate equity loss seem increasingly unlikely.
Why the lack of inventory? There are several reasons. Buyers may be ready to buy again, but some sellers are still not in a position to offer their Bainbridge Island homes for sale. When the housing market collapsed seven years ago, some homeowners’ equity loss was such that they remain unable to sell. Prices may be on the rise, but some need more time to return to pre-crash values.
Buyers always want to buy at the bottom, but sellers want to avoid selling there. Buyers are watching that bottom fade into the distance, but some sellers, pleased to watch their homes growing in value, are content to wait longer.
The National Association of Realtors says that there were just 1.93 million existing homes for sale on the national market in March, down nearly 17% from the prior year. In a well-balanced market, what had been a six month’s supply fell to just 4.7 months’ worth. Nationally, homes for sale now stay on the market for just 62 days, down from a median of 91 days only last year. Glenn Kelman, CEO of an online national real estate brokerage, put it succinctly: "Somebody rang a bell and said the boom is back, and nobody wants to be late to the party."
Homeowners who have been thinking about selling are increasingly liking what they see in today’s market — including the prospects for trading up. Even those whose previous evaluations were unsatisfactory are finding it worth another look. If you would like to find out what your home is worth today, give me a call!