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July SunCrest Market Update
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Lack of listings
As we move towards a complete housing recovery, we believe that the housing crisis is behind us. High five! Doesn’t it feel so good to say that? The total number of SunCrest homes that have sold is up. SunCrest homes are selling faster. SunCrest homes are appreciating. Distressed property sales (think: short sales and foreclosures) have almost completely disappeared in SunCrest.
However, a new challenge has surfaced to affect the SunCrest real estate market — a lack of SunCrest homes for sale. As predicted, buyer demand has remained strong throughout the summer, but there just aren’t enough homes for them to buy. A lack of sellable inventory could be causing a slowing to the SunCrest market.
Last month we discussed how the price of any item is determined by the supply of that item, and the market demand. We closely follow something called “absorption rate,” which basically measures how many homes sell over a given period of time. In 2016 so far, the current monthly absorption rate in SunCrest is 11.33. Or, roughly 11 homes are selling per month in 2016. Our current inventory? Just 22 homes for sale, or a 2-month supply of homes. You picking up what we’re putting down?
Our take:
A lack of listings could be great news for people selling this summer. Sellers may see multiple offers, spend less time on the market, or face less competition for others who aren’t quite ready. Now may be a time to list if you’ve be considering selling. For buyers, even though there’s more competition for fewer homes, interest rates remain at historic low, keeping the cost to own affordable for many.
Our SunCrest Market Update is a hyper-local analysis of the most up-to-date information regarding the SunCrest real estate market. The previous month’s SunCrest housing information and future editions are released monthly.
June SunCrest Market Update
Supply and Demand
In most parts of the country, we’re seeing higher than normal housing appreciation and a low inventory of homes for sale. This is causing a stir, and some believe we’re heading down the familiar and dangerous path that led to a bust in the housing market. “Homes are appreciating too quickly” and “people are just settling because there isn’t a better choice” are a few of the more popular phrases we’ve heard.
By definition, supply and demand dictates that the lower the supply, and higher demand, the more people are willing to pay for something. For SunCrest, that means with the current low amount of SunCrest homes for sale, and the steady amount of people looking to buy in the community, home prices are appreciating.
According to the Home Price Expectation Survey — a panel of economists, real estate experts, and market strategists — 50% of the experts cite not enough homes for sale as a primary driver of home values going up. Another 20% believe it’s because interests rates are still at historic lows. Translation: 70% believe limited inventory and low interest rates are causing this push.
We believe there’s a strong third factor: pent up seller demand. Historically, homeowners would stay in their homes an average of 6 years. Since 2007, the number has risen pretty dramatically as the economy struggled, they owed more on their homes than it was worth, and they worried about job security. With those worries somewhat faded, many are looking to finally get out of their current house and into something that better suits their current needs.
Our take:
Looking back over same period last year (Jan-May), the SunCrest market has improved in several areas:
- Homes are selling quicker. The median days on the market down from 113 to 26.
- Home prices are going up. The median home price is up 4.3%.
- Despite a lower number of home available, 11% more homes have sold this year.
There’s no doubt about it. There is a shortage of SunCrest homes for sale and folks who are ready to buy. While this doesn’t guarantee a quick sale, now’s the time to list if you’ve been on the fence about moving. And with home prices rising, it’s the time to buy before you get priced out.
Our SunCrest Market Update is a hyper-local analysis of the most up-to-date information regarding the SunCrest real estate market. The previous month’s SunCrest housing information and future editions are released monthly.
