Friday, January 25, 2013

Prices Rise as Inventory of Homes Shrink


From Portland, ME to New York to all over the country the headlines read the same, "Housing Market Showing Signs of Rebound" or "Optimism about Real Estate is on the Rise" or from "Existing Home Sales Slip, Prices Continue to Rise. From a study at Sienna College in Loudonville, NY, the real estate sentiment report released Thursday found that for the fourth quarter in 2012, the overall confidence score about the housing market increased by 11.9 points from last quarter."For the first time in this study's history, dating back to the first quarter of 2010, New Yorkers as a whole and in every area of the state say that the market has turned and that values over the last year have improved," said Don Levy, director of the Siena Research Institute, in a statement.
The Massachusetts Association of Realtors reported this week that the median selling price for single-family home in December was $303,500 which was UP 10.4 percent from $275,000 in December 2011. This is the first time that prices have increased 10 percent or more since January 2010. This is also the third straight monthly year-over-year increase. On a month-to-month basis, the December median selling price went up 2.9 percent from $295,000 in November 2012. This is the second straight month-to-month increase. They also report that inventory of single-family homes as of December 31, 2012 decreased 28.1 percent from December 2011 (25,073 listings in 2011 to 18,021 listings in 2012) which translates into 4.7 months of supply in December 2012.  This is down from 7.9 months of supply last year and down from 6.0 months in November 2012.  This was the ninth straight month of inventory decreases.

Cheif economist for the National Association of Realtors, Lawrence Yun, echoes the same for the nation stating pent-up demand is sustaining the market. "Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," he said. "The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices. Likely job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013."

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