Temperatures may still be cool this spring, but the housing market is already sizzling. A strong economy, low interest rates, and low inventory of homes are combining to make this spring a seller’s market. Millenials are being hit the hardest, as the inventory of starter homes is the sector most affected by this latest housing crunch. Sellers stand to benefit the most from the hot market unless they are looking to upgrade to a larger home in the same area.
Mamy buyers are reporting having to make offers on houses sight unseen. Taking your time just is not an option anymore, as houses are often snatched up in hours for well over asking price. Some buyers are so desperate that they are choosing to waive inspections as well. The hottest markets in the nation continue to flourish, with cities such as Las Vegas, Seattle, and San Jose seeing double-digit annual price increases as those cities ride the wave of thriving technology industries. In addition to the historically hot markets, new entrants such as Kansas City, Nashville, and Salt Lake City are also seeing unprecedented increases in home values. On the other end of the spectrum, cities such as Baltimore and Philadelphia are holding steady with home prices, while sales have dropped in Baton Rouge, Toledo, and Hartford.
Because of the increasing home prices, many homeowners are deciding to stay in their current homes. This compounds the problem by pushing up home values and decreasing the supply of homes on the market. This decision to stay put contributed to the data in a February report showing only a 3.4-month supply of existing homes on the market across the country, according to the National Association of Realtors (NAR). This figure was the lowest on record for that month and well below the average six-month inventory. This data also factored in pushing up the median home price to $241,700, an increase of 5.9% from February 2017.