“Fast Fact: Forty percent of sales in October sold at or above list price, an increase from 33 percent last October.
Pending home sales were mostly unchanged in October, but did squeak out a meager gain for the second consecutive month.
Lawrence Yun, NAR chief economist, says October’s minuscule uptick in contract activity nudged pending sales up to their highest level since July.
“Most of the country last month saw at least a small increase in contract signings and more notably, activity in all four major regions is up from a year ago,” added Yun. “Despite limited listings and steadfast price growth that’s now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas.”
On the topic of housing supply — which has been grossly inadequate all year — Yun explains that the unwelcoming but expected seasonal retreat in new listings is now arriving at a time when price growth remains around triple the pace of wages and properties continue to sell at a much faster pace than a year ago. Furthermore, highlighting the heightened imbalance of supply in relation to demand, 40 percent of sales in October sold at or above list price, an increase from 33 percent last October.
“Low supply has kept prices elevated all year and has put pressure on the budgets of buyers,” Yun said. “With mortgage rates expected to rise into next year and put added strain on affordability, sales expansion will be contingent on more inventory coming onto the market and continued job gains.”
Tips to Help You Find a Home in a Low-Inventory Market
Follow these tips to help find a home sooner rather than later.
Follow the inventory: Inventory varies by location, property type and price range. You will have more to choose from, and probably get more bang for your buck if you search for a house in an area with more availability.
Look for homes investors avoid: Investors tend to steer clear of homes that cannot be flipped or rented, such as those in gated communities. Some of these communities let investors get away with flipping and renting when the market was hurting, but with the housing market recovery, homeowner associations are cracking down on investor activity.
Don’t forget “expired” and “canceled” listings: Many people try to sell their house by listing it on an MLS—but fail to complete a sale. Those listings become “expired” or “canceled.” Have a REALTOR® assist you in finding a home that is not currently on the market.
Seasonal patterns can favor buyers: Remember there are clear seasonal patterns for housing inventory. Identifying these patterns with a REALTOR® in your area can open up more opportunity for a great home purchase.