Real Estate Market

June 2015

Existing Home Sales Report

The National Association of Realtors® reports that, even with homes selling more briskly than at any time since July 2013, transactions for existing homes slowed in April but sales still measured above an annual sales pace of five million for the second consecutive month. Every major US region -- the Midwest was the sole exception -- saw sales declines in April. Sales of existing homes in April (which tracks completed transactions for single–family homes, townhomes, condominiums and co–ops) fell 3.3 percent to a seasonally adjusted annual rate of 5.04 million from an upwardly revised 5.21 million in March.

Nevertheless, even with the monthly reduction, sales have grown year–over–year for seven months in a row and remain 6.1 percent higher than one year ago.

Existing Home Sales By Region

NAR's chief economist, Lawrence Yun indicated that sales in April did not measure up with the strong gains observed in March. According to Yun, "April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices." Yun added, "However, the overall data and feedback we're hearing from Realtors® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes."

  • Total housing inventory at April's conclusion grew 10.0 percent to 2.21 million available existing homes. 
  • Unsold inventory sits at a 5.3–month supply at the current sales pace, higher than the level of 4.6 months seen in March.
  • April's median price for existing homes (all home types) was $219,400, or 8.9 percent higher than April 2014. This is the 38th month in a row of year–over–year price growth, and it's the most significant since January 2014 (10.1 percent).
  • Due to home demand significantly outpacing supply, properties sold in April more briskly (39 days) than at any time since July 2013 (42 days). 
  • Sales to first–time buyers in April remained at 30 percent for a second consecutive month. This is extremely similer to April, 2014, when first–time buyers generated 29 percent of all transactions.

Mortgage Affordability Update

According to Freddie Mac, the average commitment rate for a 30–year, conventional, fixed–rate mortgage measured below 4.00 percent for a fifth straight month, dropping in April to 3.67 percent from 3.77 percent in March.

Chris Polychron, president of NAR and an executive broker with 1st Choice Realty in Hot Springs, Ark., cautions that closings for some home sales could fall following August 1 and into the autumn as lenders shift to the new closing procedures and documentation that will be required by the Consumer Financial Protection Bureau's Real Estate Settlement and Procedures Act and Truth in Lending Act's (RESPA–TILA) integrated disclosure rule.

According to Polychron, "There likely will be bumps in the closing process while all parties get used to the new requirements." NAR's president also added, "We hope that the move away from the HUD–1 is smooth, but even if only 10 percent of transactions experience closing issues, that's as many as 40,000 transactions a month." In his testimony before Congress on May 14, Polychron advocated for a grace period until the end of 2015 in order to delay enforcement of the new rules until the slower winter months.

Summer Selling Opportunities

Sellers, you have an excellent opportunity to sell your home this season if you have the right pricing strategy in place from the start! Studies show that the longer a property stays on the market, the less the seller will net upon the sale. It is very important to price your property at a competitive market value at the signing of your listing contract. The market is so competitive that even over-pricing by a few thousand dollars could mean that your house will not sell.

An Overpriced Home:
· Minimizes offers
· Lowers agents response
· Limits qualified buyers
· Lowers showings
· Lowers prospects
· Limits financing
· Wastes advertising dollars
· Nets less for the seller

When you are ready, contact us today for a personal market value analysis of your home. No hassles or obligation - just honest advice on how to get top dollar for your home!

A Higher Level of Service!

Linda Green Cal BRE# 01410438
Garrison Green Cal BRE# 01487280