The Bay Area’s housing market has seen a rise in sale prices as strong buyer demand, historically attractive interest rates, an improving economy and a shortage of listings are combining to create a robust seller’s market.
The region’s median sale price of $531,000 is up 33% year-to-date compared with the same period last year, according to MLS data analyzed by Coldwell Banker Residential Brokerage. In addition, the average sale price is up 25% over the past year to $680,000.
One of the reasons for the surge in prices is that there just aren’t enough homes on the market to meet buyer demand. Inventory has fallen to its lowest level in many years with Bay Area active listings in May down more than 50% from a year ago, according to MLS data.
The Bay Area isn’t alone. According to statistics compiled by the National Association of Realtors® the inventory of homes for sale nationwide hasn’t been this low since the late 1990s.
At the same time, NAR has determined that there have been signs that the U.S. housing market is truly on the road to recovery, including:
• 17 months straight of improving sales;
• 12 months of price increases;
• A 20% jump in new home sales and
• Construction permits up 25%.
The median existing single-family home price nationwide rose in 133 out of 150 metropolitan statistical areas (MSAs) nationwide in the first quarter of 2013 compared with the first quarter of last year, NAR reported. The San Francisco MSA saw a 32.6% increase in the first three months of the year.
“The supply/demand balance is clearly tilted toward sellers in a good portion of the country,” said Lawrence Yun, NAR’s chief economist. “Inventory conditions are expected to remain fairly constrained this year, so overall price increases should be well above the historic gain of one-to-two percentage points above the rate of inflation.”
Some of the previously hard-hit housing markets like Phoenix, Sacramento and Miami continue to see a “dramatic turnaround,” Yun added, while several new metropolitan areas like Atlanta, Minneapolis and Seattle “have begun to show strong signs of upward momentum.”
Although the decline in inventory is challenging would-be homebuyers, the trend has created a window of opportunity for savvy sellers who want to take advantage of a rebound in the housing market.
Home prices have bounced back significantly in the past year or two – in some cities to levels we haven’t seen since before the recession.
In some cases, homeowners who held off selling before because they were “underwater” in their mortgage and would have to do a short sale may now be able to pull equity out of their homes when they sell.
If you’ve been thinking about selling your home but were concerned that sale prices were too low, you may be surprised by what you could get for your property in this seller’s market.
“It’s Economics 101,” DataQuick, the La Jolla-based real estate information firm said in a recent report. “Prices go up as growing demand meets an exceptionally low supply of homes for sale.”
“There’s been a shift in psychology, where more people worry prices will rise and fewer fear a decline,” said John Walsh, president of DataQuick. “It’s drawn a lot of folks off the fence.”
Right now, sellers have an advantage in this market. Of course, as history has taught us, conditions can change quickly in the housing market and there’s no telling when that may happen.
“The more prices rise…the more likely we’ll see a lot more people put their homes on the market,” Walsh said. “There’s pent-up demand among potential sellers, too, and many will try to move as soon as it makes sense.”
So if you’ve been considering listing your home, you may want to do it sooner rather than later while the balance between supply and demand is still in your favor.
One way to get started is to turn to our nation’s leading real estate company. Coldwell Banker Real Estate is the number one brokerage in the U.S. with nearly $160 billion in sales volume last year, according to a recent ranking by Real Trends magazine.
Coldwell Banker sets the bar when it comes to real estate services. We’re No. 1 in so many ways:
• Coldwell Banker’s average national sales price is 20% higher than the national average reported by NAR;
• Our parent company, NRT LLC, has been ranked No. 1 nationally in real estate sales volume and units sold for 16 consecutive years;
• We’re a leading marketer of $1 million-plus luxury homes in the country, selling $86.1 million in sales volume each day!
• We have the No. 1 most visited real estate website in America, according to a 2012 Nielsen/Net Ratings Report;
Now may be the time to make your move and take advantage of the housing rebound. I’m ready to help. Give me a call and we’ll get started today.