Housing supply has tied down in most U.S cities but that does not mean it's a sellers market. Today's home buyers are a finicky lot, mortgage dependent lot and a confidence lacking lot. They may want to buy a house but they're not as willing to be as house poor today as they might have been in the past. That is why it is more important than ever today as the buyer and the seller to know your market well and know it's housing value even better! Now just under 1/3 of U.S housing markets today are seeing homes sell for above asking price, 60% are still seeing homes sales below. And about 14% are seeing homes are going at market value.
Alright, so where are the sellers in the driver seat? The shocker the Bay area of California that where homes are selling for 108% of asking price on average! But sellers are also getting more than asking in:
- Washinton D.C.,
- Winson Salem, N.C,
- Cass County, ND.
Now the buyers are more in control at Bulrington VT, Baltimore MD, Pittsburg PA, St.Louis MO and Atlanta GA. Sellers are getting about 80% of asking prices in those markets even though supplied listings are still limited.
So where are the States even?
- DC Suburbs/ Montgomery County, MD
- Riverside County, CA
- Phoenix, AZ Metro Area
- Raleigh, NC
Again it's vital to know your neighborhood price maxium. Even more important is to know when to walk away from a deal.
Is the housing market about to go ballistic? We think it already started! So you've got this really wonderful combination of mortgage rates that are still low, a little bit of a fear that they won't stay that way toward the end of the year. You had a really terrible winter. Which is why people were stuck in their homes. They came out late this year it's why you see April up 13.4% on pending home sales, year over year it's a tremendous gain. You had new housing starts explode up 22% and then if you just look at pending home sales by regions up to 10% in the NorthEast, up 5% in the MidWest.
You've got millenials who are getting into that 35 - 39 age range finally. And thats a really important component to the need for new single family homes. You've got people that were stuck in their homes all winter, and now you're starting to see show up in the data. We can point out the ITB, which is the purest way to play an index of home builders was stuck below 26 going back to 2012 that was historical resistance. It's gotten above that level is now support this recent bounce happened right of this $26.00 dollar level, It's txt book.
We think there's another leg higher in the housing stocks. We would suggest hold them. Housing is going to be okay especially with mortgage affordability is an important part of this. We're actually not seeing mortgage burdens as a big part of this as someone's household spend as thay have been historically. We think there's this critical sentiment component the Feds lifting off in September. As soon as people get that confirmation the Fed is dead serious about moving. We think it brings foward both mortgage activity as well as business activity for those people been waiting on the side lines haven't felt the urgency.