Central Ohio has been in a seller’s market for most of 2013. Home values are up, closed sales are up and so are the number of houses listed for sale. So, what can go wrong?
Chances are that this housing recovery will will continue for the next 3 to 5 years, probably at a lower pace than this year.
However, there is chance that a short-term (6-months) buyers market is approaching (at least in some parts of Columbus).
This is good news for buyers. It will give them an opportunity to buy the home of their choice while still benefiting from reasonable interest rates, after they were side-lined during the super hot real estate market earlier this year.
It may be hard to believe that the market is changing that quickly. So, let me explain why we may experience a mini buyers market inside the ongoing sellers market.
A Local, Short-Term Buyers Market
I strongly believe that the housing market will continue to grow for years to come. Most likely, 2014 will beat 2013 in terms of homes sold and home values.
So, why do I believe that the rest of 2013 is not that rosy for sellers?
Why will buyers have the upper hand (at least for a few months).
There are 3 reason for that:
Inventory
The inventory of homes for sales has grown consistently by around 9% year over year. While we experienced record low inventories in spring, an ever increasing number of home owners decided to put their properties on the market.
We are now back to normal inventory levels. Which means that buyers have more choices, and the time it takes to sell a house is back at the normal 60 to 90 days.
As home values are up, more sellers gained equity and were able to put their home on the market without losing money. Basically, they escaped their under-water status and became regular sellers (vs. short sale sellers).
That alone had a significant impact on home values.
Home buyers are catching up, too. More home buyers decided to build a home, as it was impossible to find what they were looking for in the sellers market. We don’t see a major push in new home construction, yet. That will happen next year.
A Short Selling Season
This year’s home selling season started earlier than usual. It may have been due to the warm winter, or because many buyers have been holding back last year. They hit the market with a vengeance and started buying homes in the middle of winter.
Although the buying season began early, the low inventory of homes for sale and the sometimes slow mortgage approval process prevented an explosion of the real estate market. Many transactions took much longer to close than expected. Home buyers were struggling to move into their new residences before the start of the new school year.
The School Starts Earlier
This is the final reason why this year’s selling season was cut short: the start of the new school year.
In many school districts classes start in the middle of August. August used to be the prime month for real estate sales. This year, however, many home buyers could not even find a house before the start of school.
The combination of a rapidly growing inventory combined with a shorter selling season for most buyers with kids has led to a temporary “oversupply” of homes for sale and a reduced demand. These are signs of a buyers market.
A Great Opportunity for Buyers
Here’s my advice for home buyers: take advantage of this short opportunity.
The real estate market will continue to grow and more buyers will join the market. Now may be the best time to buy a home at a great price. Most sellers are very motivated to close the transaction before the end of the year.
And don’t forget that interest rates will continue to go up and so will home prices. If you buy before the end of the year, you can afford a much larger house, and secure a lower payment than anytime in the foreseeable future.
Fall is a great season to move.
The weather is nice and not too hot. There’s little chance of extended rains, and we don’t expect snow until December.
Call me now and let’s start your home search today! This may be your last chance to catch a glimpse of a buyers market for years to come.