There is one sign that our market is improving that we can’t miss, and that’s when our phone rings with new customers ready to buy or sell. But there are other indicators—not including the familiar days on the market, new listings per month, and new contract activity. Here in Wasilla we sold 34 more homes in April than we did in March; the number of days on the market came down from 126 to 98. We still have more new listings coming on the market than typical which means in some price ranges we still have an excess supply of inventory.
Bottom line is the market is making progress. As long as builders continue to curtail their spec building in the $300,000 plus range our market will continue to recover. As I have said before, sellers are in a pricing war and a beauty contest at the same time. If you want to sell you have to "be the prettiest" and the "lowest price" as compared to your competition.
5 Signs of a Housing Market Pickup
Sign #1: New Jobs vs. New Housing: Historically one new home owner is created for every two new jobs, so if job creation continues in Wasilla and builders scale back on production, it’s just a matter of time before the supply and demand equation moves toward equilibrium.
Sign #2: Fewer Builder Concessions: Look for new home builders to curtail their offerings of paying buyer closing costs, offering selling bonuses or other concessions they rolled out at the start of the downturn.
Sign #3: Months’ Supply: We had a 10-18 months supply (depending on the price range) of housing during most of 2007. Currently in price ranges under $250,000 the supply of homes is 3-4 months. Over $250,000 the months’ supply is still 7-9 months.
Sign #4 Visitors per Listing: Look at the visitor trends on web sites. The more visitors looking at homes on line and the more pages they look at suggest buyers are getting serious. On my web site we typically have 135 unique visitors per day viewing over 1200 pages. Friday we had 292 unique visitors on the site.
Sign #5 Rising Number of Homes Under Contract (pending sale): When the number of new listings per month is similar to the number of new contracts, we have equilibrium. If the number of new listings outpaces new contracts per month, we still have a growing inventory of homes which will equate into greater supply than demand. We haven’t reached equilibrium in our market in most price ranges yet, but we are moving closer each month.
Will you regret not buying in 2008? With low interest rates, motivated sellers, and reduced prices, will people look back at 2008 and wonder why they didn't take advantage of an ideal buying situation? This is the beginning of my 25th year in real estate. I had only been selling for 4 years when the market declined to an all time low in 1988 through 1990. Many of my friends later told me how they regretted not buying when the market was at the bottom. The trouble then as is the trouble now, none of us knew until after the fact where the bottom was. What I do know is we have low interest rates, motivated sellers and job growth making this a great time to buy. Call me anytime with questions, 907-373-3575 Kristan Cole.