The real estate market has been off to a roar this spring. The fact is, the market is performing so strongly that the National Association of REALTORS® has upgraded its forecast for the year.
The Real Estate Market Is Over performing
At the start of the year, home sales were anticipated to match last year’s pace as a result of higher mortgage rates and diminishing affordability. But the market is hardly slowing down, notes Lawrence Yun, NAR’s chief economist. He now predicts existing-home sales to increase by 3.5%, and home prices likely will increase 5 % this coming year.
Home sales are strong: Real estate professionals report an increase in visitors at listings and mortgage applications to purchase a home remain above year-ago levels. Also, signed contracts to purchase a home are essentially running at decade highs, Yun notes.
“Not only are the buyers out in the market, but they are committing quickly,” Yun notes in a recent column for The Hill. “The typical days on the market for a newly listed property is short at only a month. A month’s supply of inventory is less than four months, which is well below the six to seven months that is considered more balanced.”
Escalation clauses in contracts are reportedly growing. This is where a potential buyer bids on a home at one price but is willing to increase the bid if the seller receives any higher bid.
However the hot market shouldn’t offer up any fears of a housing bubble, Yun notes. Unlike years past, buyers are coming in with higher down payments and higher credit scores. Also, the lack of new-home construction is an additional reason not to fear a bubble, he says. Prices don’t drop when there are inadequate supplies, and home-building is basically at half the level it had been in the mid 2000s.
The strengthening real estate market is now one major contributor to economic growth too, Yun notes. Higher home prices and housing equity will help improve consumer spending, he adds.
“With no imminent threat of a recession, the housing market’s strong first quarter sets the foundation for continued gains the rest of the year,” Yun writes.
So if you have been thinking about purchasing a new home, now may be the time to do so. Nick & Cindy Davis are ready to assist you here in the Tampa Bay and Surrounding areas. We are always just a click here or call to 813-300-7116 away.
