Would-Be Sellers Appear Ready to Boost Inventory

There’s a fresh sign that more inventory may be coming to the market, as homeowners deepen their faith in selling. The percentage of consumers who are “strongly” optimistic that now is a good time to sell hit 46% in the second quarter of this year, a significant increase from the 37% who said the same thing in the first quarter, according to the National Association of REALTORS®’ Housing Opportunities and Market Experience Survey, which was released Wednesday.

Home prices have begun moderating in recent months, which may be prompting homeowners to consider selling sooner in order to cash in before prices go any lower. “With home price appreciation slowing, home sellers understand the days of large price gains from holding an extra year are over,” says NAR Chief Economist Lawrence Yun.

Homeowners have been putting off a move in recent years, reluctant to give up low interest rates on their current loans and fearing the difficulty of finding another home to buy amid an inventory crunch. The inventory problem, though, could be eased if more would-be sellers decide to put their homes up for sale.

Other findings from the HOME Survey include:

Not just seller optimism. More Americans also believe now is a good time to buy. Thirty-eight percent of respondents to NAR’s survey say they “strongly agree” that now is the right time to purchase a home, and 27% “moderately agree.” Thirty-five percent say it’s not a good time to buy, according to the survey.
Confidence in the overall economy. A rosier economic outlook may be generating some of the optimism in the housing market. Fifty-five percent of consumers now say they think the economy is improving, up from 53% in the first quarter of 2019. Consumers who are the most upbeat about the economy tend to earn $100,000 or more and reside in rural areas, the survey shows.
Generation X offers important clues. The most notable change in consumer economic perceptions, Yun says, is among Gen Xers, who have tended to face the most financial pressures in recent years compared to other age groups. Fifty-three percent of Gen Xers say they believe the economy is improving, up from 50% in the first quarter. “Many in the Generation X population find themselves needing to purchase multigenerational homes,” Yun says. “Also, they may be feeling financial stress from caring for aging parents and children of all ages. Nonetheless, they have an optimistic outlook about the future.”
Mortgage rates boost sales. Overall, of the respondents surveyed who don’t currently own a home, 27% say they believe it would be difficult to qualify for a mortgage due to their financial situation; 30% said it would be somewhat difficult to qualify. Mortgage affordability showed some improvement in the second quarter, and the trend likely will continue, Yun says. “Lower mortgage rates, along with job and wage growth, will lead to an increase in sales and thereby contribute positively to economic growth in the upcoming quarters.”

~Realtor Magazine

King County housing market soars skyward ahead of summer

After a lull to start the year, the King County housing market is once again headed skyward.

Since February, the median closing price for residential homes in King County has yet to increase by more than 1 percent in any month, even falling by 5 percent in March. That’s not the case for May, where that median price climbed almost 7 percent ahead of the busy summer months.

“We had a pretty robust May,” Windermere Real Estate Chief Economist Matthew Gardner told KIRO Radio’s Dave Ross. “Essentially we saw mortgage rates drop precipitously down to about 4.2, 4.3 percent at the start of the month, down to 4 percent at the end. That got a lot of buyers off the fence.”

With more buyers entering the fray, pending sales in King County jumped 5 percent in May.

Even with that, though, prices are still well below 2018 levels, with the median residential home price falling 3.62 percent year-over-year. Year-over-year prices in King County have dipped in all but one month in 2019. The only exception occurred during February’s slight 0.78 percent bump.

According to Gardner, that’s been driven primarily by an increase in available homes.

“The number of homes are in the market continues to rise, with more choices for buyers,” he noted. “It’s still pretty tight, but we are seeing more inventory.”

While the summer months are typically the hottest both for weather and home prices, Gardner still expects increases to arrive “absolutely at more modest rates through the balance of the year.”

Down south, prices continued to drop in May, marked by a massive 5.24 percent dip in median residential prices in Pierce County.

“If you look at sales prices, let’s say for May — in King County: $645,000. In Pierce County? $365,000. A significant difference,” Gardner pointed out. “Based on affordability, that’s meaning a lot of people are heading down south.”

~My Northwest Staff