CABOR Members Help Buyers Navigate Tight Market
Spring is traditionally a favorable time of year for home buyers; however, with a limited number of homes available for purchase, sales nationwide are slowing. According to the National Association of REALTORS® (NAR) housing inventories are near decade lows, and are continuing to pressure home prices.
“Recent data shows there is more demand than supply in the current market, which means conditions broadly favor sellers,” said Joanne Zettl, Chairwoman of the Cleveland Area Board of REALTORS® (CABOR). “Meanwhile, buyers are out there looking to purchase homes. Buyer traffic is 25 percent above a year ago and sellers are reportedly receiving multiple bids. The good news for buyers is home construction is rising and low mortgage rates are keeping housing affordable. However, underwriting standards remain excessively tight.”
NAR data shows that total housing inventory at the end of March is 1.93 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace. NAR Chief Economist Lawrence Yun stressed the need for a housing supply of over 6 months to have a generally balanced market between buyers and sellers. The current supply of homes for sale is 17 percent below year-ago levels, according to NAR data, and homes are also selling much faster. The typical home sold in March was on the market for one month less than it took to sell a year ago. The median time on market for all homes was 62 days in March down from 74 days in February.
Locally, Cuyahoga County continues to experience an improving market. The latest numbers available show the number of new listings for April 2013 at 2,185, or 7.6% higher than one year ago. Likewise, the number of properties sold has also increased – 23.5% higher than the same time last year. Additionally, average time on the market is down to 111 days, a 12.6 percent decrease from April 2012, and the year to date average sale price is up 8.2%, to $121,294.
“Homeownership remains desirable to many renters,” said Zettl. “Its benefits are still very evident and opportunities for buyers exist. Just because the current market tends to favor sellers does not mean buyers cannot still find their dream home.”
CABOR has identified several tips for buyers in today’s market. First, before you start looking at potential homes, know your budget. CABOR says lenders will evaluate your income, savings and credit history to qualify and approve you for a mortgage.
Zettl also recommends identifying neighborhoods of interest. Also, think about what you need and want in a home, whether it is a certain number of bedrooms, a small yard, or a garage. Once you have a good idea about what you are looking for, it is easier to know it when you see it.
“When homes are selling quickly, it’s important for buyers to visit the home as close to when it goes on the market as possible,” said Zettl. “Open houses are also a great way to see a lot of houses in a short amount of time. Buyers can get a good sense of what’s available in the area and what their budget can afford.”
Most importantly, Zettl recommends working with a REALTOR®. “Whether you are buying or selling a home, using a REALTOR® is a smart move,” said Zettl. “REALTORS® understand their local markets and can negotiate on your behalf. Buying and selling a home is one of life’s biggest decisions and a REALTOR® can guide you through the process.”