Low Housing SupplyThe National Association of Realtors (NAR) estimates that there were 22% less homes for sale by the end of October 2012 than there were at the same time the previous year. Accordingly, the Winter of 2012 is witnessing the lowest number of homes available for sale in a decade.
Zillow.com similarly reports a year-over-year decline in national housing inventory of 19.4%. The crew at Keeping Matters Current (KCM) used this Zillow data to create the useful info-graphic below to further illustrate the annual decrease in inventory experienced by 26 major metropolitan cities across the country.
High Buyer DemandA fundamental economic prinicple dictates that when supply drops, demand is sure to rise. True to form, October 2012 saw homes sell at an annual rate of 10.9% more than a year earlier according to NAR estimates. With mortgage interest rates now hovering at historically low levels, a national buying frenzy has gradually ensued over the course of the year 2012. According to the Mortgage Bankers Association, home loan applications in early November 2012 were 22% higher than the year prior.
A Perfect Storm for Home SalesDecreased Supply + Increased Demand = Higher Prices. So not surprisingly, NAR reported that the national median home price rose by 11.1% from October 2011 to October 2012. In fact, October 2012 represented the 16th consecutive month of year-over-year increases in home sales, and the eighth consecutive month of increased median home prices.
What About Your Local Market?According to a Wall Street Journal Survey, the inventory of available homes for sale has fallen in all of the 28 major metropolitan areas across the nation. Readers can determine the housing values and trends in the nearest metropolitan areas by using the Wall Street Journal's Interactive Home Value Index. This easy to use tool is great for examining how these developments are impacting various local real estate markets.
All of the data indicates that the housing market trade winds changed direction in 2012. So if you are looking to move it may be a good idea to make it ahead of the oncoming storm.