So far, so good for 2015
As we approach the midpoint of 2015, the residential real estate market is on track for its best year since 2006, the peak of the housing bubble. In the Charleston area, June sales exceeded all expectations with almost 1700 closings, which is an almost 15% increase over last year. What’s driving this growth and what can we expect in the next half of the year? Here is what the folks at realtor.com our telling us:
- Job growth is powering the surge in demand for homes. More than 3 million jobs have been created in the past 12 months. And more than 1 million jobs have been created for 25- to 34-year-olds, the age range in which most Americans buy their first home.
- We’re seeing record traffic on the web. Real estate websites across the board are experiencing 15% year-over-year growth in unique users. The vast majority of our visitors report that they intend to purchase a home.
- With rising demand, homes are selling more quickly, too. In May the median age of inventory (homes on the market) nationwide was 66 days—that’s 8 days faster than for last year. The hottest markets are seeing inventory move 18 to 45 days faster.
- A rapidly declining age of inventory signals that demand is growing more rapidly than supply. Indeed, we’ve had 32 months in a row of existing-home inventory at less than a six months’ supply. That’s why we’re also seeing above-normal price appreciation.
- Year-over-year median home price appreciation reached 9% in April, which has helped existing homeowners see strong gains in equity.
- Meanwhile, rents are increasing at a similar or even stronger pace than home prices. Record numbers of renting households have driven down apartment vacancies, and low vacancies led to higher rents. As a result, it is cheaper to buy rather than rent in 80% of the counties in the U.S.
- And now the clock is ticking as mortgage rates are on the rise. With strong employment data in April and May, the average 30-year fixed conforming mortgage rate broke through the 4% level, and in the past week moved above 4.10%.
- Is that slowing down demand? No, just the opposite. Consumers can clearly see that affordability is going down for real, so those who are ready and able to buy are searching for homes, looking at listings, visiting open houses, applying for mortgages, and signing contracts.
- In April, new-home sales were up 26% over last year. Pending home sales, which are new contracts on existing homes, were up 14%.
- At this level of growth, total home sales in 2015 could come close to 6 million, which is a level comparable to 2007 (if not quite at the level of peak 2006). But 2007 was a year of decline for the housing market, whereas in 2015, we’re expecting more good things to come.
Count on The Avera Group for expert real estate advice!
We hope you have found the information above as insightful and encouraging as we did. Seeing the national housing market recover is definitely a welcome sight! If you are thinking of buying or selling call Paige today! We’d be happy to review statistics that are pertinent to your property or a home you like!