(Newswire.net — April 27, 2017) — There’s really only one way to describe the state of the national real estate market right now: red hot. In most markets around the country, homes are selling at or above asking price within just a few short days. This is good news for sellers and nerve-racking for buyers. But regardless of which side of the closing table you sit on, the current state of the market spells good things ahead for the American economy.
Spring: Always the Best Time to Sell
Regardless of whether the economy is up or down, spring has historically been the best time to sell each year. According to a Zillow study from 2016, mid-April through mid-May offers the best ROI. Specifically, listings posted in the first half of May perform best. The data reveals that they sell 18.5 days faster and net sellers an average of $1,700 more per listing.
Part of the reason spring is such a hot time to sell is that the weeks between November and January are considered the worst times for home sales. There are a few factors believed to be involved in this.
“The first is the weather. During a cold winter, particularly in areas that receive snow and wind, people don’t want to trudge outside in search of a home. Homes don’t look as good with gray skies and dormant plants, either,” Green Residential explains. “When winter is over, people have spring fever and are excited about the prospect of a new and a beautiful change of scenery. At this point, home sales skyrocket.”
A Look at the Current Market
This spring hasn’t been an exception to the rule. Homes are selling in record time and the fast-paced nature of the market is leaving many intimidated. There are a number of factors involved, but low interest rates and the threat of rising rates in the coming months are certainly in play.
As Diana Olick of CNBC notes, home sales jumped nearly 9 percent in March compared to March 2016, despite the fact that inventory dropped by 13 percent.
“That demand dynamic further increased competition in the market, resulting in the fastest average sales pace since Redfin began tracking in 2010,” Olick points out. “The typical home went under contract in just 49 days, down from 60 days a year ago.”
As for value, the median price of a home sold in March of this year was $273,000. That’s a 7.5 percent year over year increase from last March.
And while the hot market is good for sellers and welcomed by those who are hoping to see property values increase, it’s not very friendly to first-time buyers. Pretty soon, consumer budgets will lag behind the price of appreciation. This, combined with low inventory and strong competition, will push first-timers out.
No Signs of Slowing
So far this spring, the hottest individual real estate markets nationally are Tampa, FL, Dallas, TX, Columbus, OH, Las Vegas, NV, and Jacksonville, FL. And while there are some factors that could impact the national market in the coming months, there aren’t any signs of slowing down at the present time.
As spring turns into summer, real estate experts are expecting these seller-friendly trends to continue. In fact, it’s likely that things will get even hotter before they cool off. The more talk there is about rising interest rates, the more we’ll see sellers rush to get in offers. By that same token, sellers are also motivated to sell quickly so they can lock in new mortgages at low rates.
If nothing else, it’ll be interesting for the rest of us to sit back and watch. A hot real estate market tends to bode well for the health of the economy.