Low inventory and strong demand were hallmarks of the first quarter of the year, but signs of inventory life are showing as potential sellers begin to warm up to putting their homes on the market.
Let's start with the good news:
For sellers, home sales prices have been going up on a year-over-year basis for more than two years! The median sales price in March was $190,000, up 7.6 percent over last year, according to the Minneapolis Area Association of REALTORS®.
Factors contributing to sales price increases include stiff competition among buyers and the decline of foreclosure and short sale transactions. Distressed sales were down 29.2 percent from March of 2013, making way for more traditional (and higher-priced) sales.
In addition to prices going up, homes are selling faster. The average number of days on market was 95 in March, down 12 percent from last year.
For buyers, rates for 30-year conventional mortgages ticked down the week of April 7, according to Freddie Mac. Though rates are higher than last year at this time, these historically low rates still contribute to affordable mortgages. Get some fun perspective on historical mortgage rates here.
As the weather finally warms up, more sellers are expected to list their homes for sale. In March, new listings were up 5.5 percent over March 2012. That should provide some relief for buyers who simply can't find homes to meet their needs.
Some challenges to watch for:
If you're buying a home, especially in popular neighborhoods and price points, competition can be fierce. Don't be surprised if you end up in a multiple offer situation. Check out this video that can help you prepare to put your best offer forward.
For sellers, being in a "sellers' market" can be an advantage, but don't try to push the limits too far. Homes that spark bidding wars are appropriately priced for their condition and neighborhood. Overpriced homes can still be slow to sell and may not draw the attention and competition of buyers.
If you aren't sure what your home may actually be worth, there is no online substitute for a professional comparative market analysis by one of our neighborhood experts. A REALTOR® can help you determine a price for your home based on many factors that online valuation models can't duplicate. Our Customer Care team can match you up with an agent in your area.