Housing Update: Demand Up, Supply Down, Prices Increasing
In Long Beach, we’ve definitely noticed that demand is up, inventory is down and prices are on the upswing. From a national standpoint, that’s also the housing update. Earlier this week, the National Association of Realtors (NAR) released their latest quarterly report. The report covered three important aspects of the housing market:
- Buyer Demand
- Supply of Housing Inventory
- Single Family Residential Prices
Total existing-home sales (which include single family and condo) were at an annual rate of 4.97 million in the first quarter of 2015. This represents a number which is 6.2 percent higher than the pace during the first quarter of 2014.
“Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market,” said Lawrence Yun, Chief economist of NAR.
Supply of Housing Inventory
There were 2 million existing homes available for sale at the end of the first quarter of 2015 which represents a 4.6 months’ supply of inventory which is down from 4.9 months a year ago. A healthy balance of supply between buyers and sellers is 6 to 7 months.
“With supply remaining tight—especially at the entry-level price range—buyers will need the expertise and local market insight of a Realtor to help them through each intricate step of the buying process,” Yun said.
Single Family Residential Prices
Home prices accelerated in 148 out of 174 metro areas (85%) during the first quarter of 2015 and the number of areas experiencing double-digit price appreciation doubled compared to last quarter. Compared to last quarter, the number of regions experiencing double-digit price appreciation doubled.
The national median existing single-family home price in the first quarter was $205,200, compared to $191,100 in first quarter of 2014. This represents a 7.4% increase year-over-year.
“Stronger demand without increasing supply led to faster price growth in many markets,” Yun said. “Homeowners throughout the country have enjoyed accumulating household wealth through the steady rise in home values in the past few years.”
Whether you are thinking about buying your first home or selling your current residence to buy the home of your dreams, meet with a professional in your market to discuss how the numbers above have affected your neighborhood’s prices.