Abbreviated Highlights:

• These price bands are seeing mostly unexceptional demand, but exceptionally low supply, which is leading to multiple offer situations and strong upward price pressure.
  • $100K-$125K – 0.8 months (versus 1.8 on May 1, 2014)
  • $125K-$150K – 0.9 months (versus 1.9)
  • $150K-$175K – 1.1 months (versus 2.3)
  • $175K-$200K – 1.3 months (versus 2.6)
• For the market as a whole we currently see 3.1 months of supply, which is significantly below normal, but not excessively so. However, when we look at the single-family market by price range we see certain price bands with much lower supply:
• From a seller’s perspective there is a lot of encouragement… though buyers might be dismayed to see price per sq. ft. rise by almost 3% in a single month.
• Overall demand has returned to just above normal with little to no sign of further momentum beyond this point. Currently the supply situation is the most important thing to watch and this is what determines how much competition buyers will experience.
• … significant improvement in demand and volumes, though different price ranges are experiencing very different supply dynamics.
• Demand is actually lower than last year between $100K and $150K with only 1,040 sales in April 2015 versus 1,192 in April 2014, but the lack of fresh inventory is having a dramatic impact on this sector of the market. A few years ago we had almost 7,000 active listings between $100K and $150K. Now we have just 909.
• The price band from $175K to $200K is extremely popular at the moment with 825 closed sales in April, the highest total since July 2005. $200K to $225 is another popular price range with 555 closed sales in April, the highest total since September 2006. For $225K to $250K we have to go back to June 2007 to find a month with a higher total than April 2015’s 624.
• As we move upmarket from $250K, things become a little easier for buyers because supply is less scarce. Once we get above $400K there are more active listings than last year and most buyers are having a much easier time with less competition from other buyers. In other words, demand is good but supply is plentiful at these higher price points.
• April was an outstanding month for closed sales for homes over $3 million, with 19 in all and $81.4 million in dollar volume.
• Although many are feeling more optimistic about the market, and justifiably so, the lack of supply of entry-level homes is a very troubling sign. The most obvious source of new supply would be the large number of homes that are currently owned by landlords and used as rentals. However vacancy rates are low, rents are rising and these landlords would probably buy more properties if they could rather than sell them off. There are remarkably few new homes being built below $200K and if this situation persists, it is going to remain a very competitive struggle for buyers. Prices are likely to rise faster than earnings. This is good for current homeowners but bad for those currently renting and wanting to get started in home ownership. This could become even more of a problem if mortgage interest rates rise, adding to affordability problems for the first time home buyer.  (Again, the above from The Cromford Report, abbreviated).

Please contact me to find out how the numbers apply to your house, or to discuss the opportunities available to you as a buyer!