The first quarter of the year is typically a slow one for real estate. Many of us go into hibernation mode after the busy holiday season, and only emerge once the snow has safely melted and the first signs of spring are in clear view. Though many parts of the country are still plagued with icy winds and freezing temps (ugh!), activity in the real estate market has started to heat up.
According to the National Association of Realtors®, existing home sales in March 2015 jumped to their highest annual rate in 18 months. “The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years,” says Lawrence Yun, NAR chief economist.
Total existing home sales, which include single-family homes, condos, townhomes, and co-ops, increased 6.1 percent to a seasonally adjusted annual rate of 5.19 million. This is the highest annual rate since September 2013.
An increase in sales isn’t the only good news for homeowners this spring. If you tried to sell in 2014 but didn’t receive any offers that caught your eye, you may have better luck in the upcoming months. The median single-family home price was $213,500 in March, which is up 8.7 percent from March 2014. Comparatively, the median condo price was $201,400 in March, and that’s 1.6 percent higher than this time last year.
Here’s a closer look at where we stand going into the second half spring.
Foreclosures and Short Sales
Distressed properties made up 10 percent of total existing home sales in March: 7 percent foreclosures and 3 percent short sales. Both foreclosures and short sales sold for an average discount of 16 percent below market value.
Days on Market
In March, 40 percent of the homes sold were on the market for less than a month, which means buyers are snatching up properties relatively quickly. The median number of days on the market dropped to 52 days from the 55 day median at this time last year.
Total housing inventory at the end of March reached 2 million existing homes available for sale. Unsold inventory is at a 4.6-month supply, which means it would take a little less than five months for all available inventory to sell. Since a five-to-seven month housing supply is considered balanced, this puts the ball in the sellers’ court.
The Bottom Line
The housing market is off to an encouraging start this spring. Home sales are at an 18-month high, and home prices for all housing types are up 7.8 percent over last year. If you’re a homeowner thinking about jumping into the busy spring real estate market, now might be the perfect time to do so.
Photograph: G Jackson/Arcaid/Corbis