HouseHunt Reports Strong Activity, Low Inventory in Some Markets
One sure-fire way to learn if your local housing market is heating up is to check out the number of home sales attracting multiple offers from buyers. When offers increase, there is usually a corresponding increase in buyer demand and sales activity. This leads to higher prices and tighter inventories. Ultimately, shortages of product are created in local markets.
The latter appears to be happening today in many housing markets across the country. Inside market data indicates a shortage of inventory even though bank-owned foreclosures are at a record high. Plus, home sellers who have lost part or all of their equity due to falling prices the last three years are not willing to compete with distressed property sale prices created by short sales and bank foreclosures.
The latest HouseHunt Current Market Conditions national survey shows a dramatic surge in multiple offers in the past two quarters and an even stronger increase during October, when 63% of member-agents reported them. By contrast, only 25% of member-agents reported that their clients were getting multiple offers in the first quarter of 2008.
The ratio increased to 60-40% in the second and third quarters of this year. If this trend continues -- and similar improvement is reported in other key measurements – home sellers have good reason to be more optimistic in calendar 2010.
During October of this year, first-time home buyers represented 56% of all sales; 39% were repeat and move-up buyers, and 5% percent were investors. This compares to a 52%-44%-4% ratio reported in the third quarter of this year.
HouseHunt member-agents and Industry observers credit much of the first-time buyer activity to those trying to complete purchases before the federal $8,000 tax credit deadline ends on November 30. Efforts are underway in Congress to extend the tax credit through June 30, 2010.
"Are my clients getting multiple offers? Absolutely! Especially for $200,000-and-under-priced homes," said Lisa Tapia of RE/MAX City Horizons, exclusive HouseHunt member-agent for Northwest Denver, CO. "I'm looking for listings. Extension of the federal tax credit would be the answer to by prayers!" Tapia continued: "With the decrease in supply, multiple offers are being made on single properties within one week of listing date."
Also reporting multiple listings and a tight inventory of unsold homes was Terry Oelschlaeger of CENTURY 21 Diablo Valley, exclusive HouseHunt member-agent for Concord, CA, located in the San Francisco Bay area.
"We're probably under 200 active listings," he said. "We should have 600 to 800 listings at this time of the year. The current total represents less than a one-month supply. I have 900 potential buyers in my data base and am inputting at least one new buyer a day." Average sales price in his community is now $230,000, down from $550,000 in 2005," he said. "Our starter home market continues to be dominated by bank-owned properties and short sales: "The banks continue the strategy of listing property below market value. A large buyer pool immediately responds with multiple offers"
Roberta Candela of AZ Realty One Group in Phoenix, AZ, exclusive HouseHunt member-agent for Maricopa, said is takes 10 to 15 offers, on average, to purchase a listing—many above the list price. "We have a four and one-half month supply of inventory. Many of our buyers are investors making all-cash offers." The peak selling season in Arizona began in October and will probably end in April.
Candela said the average home price in her marketplace is $125,000: "The best selling range is $100,000 to $149,000. Our prices are down 25-30% from last year. Areas attractive to buyers are located near the 101, 51 and 117 freeways because of their accessibility to the metro area."
Cindy Becker of RE/MAX Home Choice in Belle Plaine, MN, who with her husband David are exclusive HouseHunt member-agents for this suburban community near the Twin Cities, reported continued activity with first-time buyers trying to beat the deadline for the $8,000 federal tax credit but a slowdown in overall buyer activity. "Right now I'm working with five or six first-time buyers and some other prospects who need incentives to make a move. Extension of the federal tax credit would certainly help them make up their minds." Primary selling season are the summer months. Average home price is $150,000. Becker said the easy commute to Minneapolis or Mankato makes Belle Paine "an ideal place to call home."
Finally, Hannelore Schleicher of Holtzclaw Herman Real Estate Company, exclusive HouseHunt member-agent for Corpus Christi, TX, reported a positive but slower pace of buyer activity: "Yes, we're getting multiple offers, especially on properties with acreage and homes under $150,000. Our home prices haven't fluctuated much in the past few years, except on North Padre Island, and are taking a little longer to sell. First-time buyers are not a major source of business currently." Most cities within the Nueces County area are considered housing hot spots, she said.
Mike Bearden, President and CEO of HouseHunt, Inc., said preliminary survey results are encouraging but cautioned against the possibility of a quick recovery in the national housing market. "Although improving to a seven and one-half month supply, the national inventory of unsold homes, shadow inventory and foreclosed properties owned by banks is extremely large. There are too many pending short sales that are not closing. And, mortgages are too hard to get. On the bright side, possible extension of the $8,000 federal first-time buyer tax credit and streamlining the short sale process should help stimulate the market."
In other HouseHunt survey results in October:
- More than one-half of HouseHunt member-agent respondents to the random survey said price affordability was the number one reason given for sales activity in their communities. Population growth was second. Median and average home prices have come full circle in many metro areas since reaching historical highs in 2005 and 2006.
- First-time buyer activity increased from 52% to 61% in October, spurred by the rush to beat the federal tax credit deadline.
- The buyer-seller ratio also improved to 37%. Sellers represented 60% of transactions and buyers 37%. Three percent said it was about even.
- Seventy-eight percent of member-agents said it is taking more than 60 days, on average, between listings and sales. In the third quarter, the figure was 78%.
- Forty-six percent of sellers said they are getting 95% or more of their asking prices.
In related housing industry news, the National Association of Realtors reported that short sales and foreclosures made up 29% of all U.S. home sales in September. Overall existing home sales increased 9.4% over August and were up 9.2% over a year ago.
HouseHunt, Inc., is a consumer-oriented Internet firm that provides free information and services to homeowners, home buyers and home sellers in 47 states through its member-agents and through its primary web site, HouseHunt.com
|Average Time On The Market|
|60 Days Plus||90%||88%||92%||94%||88%||79%||78%||78%|
|Ask vs. Sale Price|
|Less Than 95%||52%||55%||39%||54%||65%||56%||57%||54%|
|**October results only|
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