All the news from our industry tells us our current level of activity is expected to sustain itself through next year. For the fifth consecutive week, mortgage interest rates have hovered around 4 percent. This provides some security to those buyers who have qualified for home loans but are having difficulty finding the home they want to invest in. Many fear a spike in interest rates could put them in a position where they would qualify for less house.
By now just about every would-be buyer out there knows there simply are not enough homes for sale to appease the hordes of competition. But despite the shortages, rising prices and bidding wars, more homes are expected to be sold this year than in more than a decade. Feeding the enthusiastic projections are the facts that more jobs are being created, the millenials that are catching up on student loans are beginning to form families and as mentioned, continued low interest rates make home ownership affordable.
The National Association of Realtors is bullish on the market for the next year: “The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation, and rising consumer confidence are giving more households the assurance and ability to purchase a home,” NAR Chief Economist Lawrence Yun said in a statement. “However, prices are still rising too fast in many areas and are outpacing incomes.”
In some white-hot markets along the coasts, prices are rising by double digits because of the lack of available homes to purchase. That has led many current homeowners who might be interested in trading up to a larger, nicer home in their area to hold off because those homes are simply out of their price range.
From area agents, we hear bidding wars have gotten so bad in Seattle that buyers are driving up prices 30 percent over asking in some cases. Seattle prices were up 12.2 percent year over year in February, according to the latest S&P CoreLogic Case-Schiller report. As you may recall, our own Coeur d’Alene Multiple Listing Service average price for a site-built home on less than 2 acres increased 16 percent year over year as of the end of April.
Sales of brand-new homes, which builders can’t seem to put up fast enough, are expected to jump 10.7 percent, from 560,000 in 2016 to 620,000 this year, according to NAR. They’re expected to rise an additional 8 percent in 2018, to 670,000 sales.
Of course for home sales to increase here, we need more homes on the market. New construction is not keeping pace with the growing demand for houses as our own market dynamics change and folks are reluctant to give up their existing homes until finding and affording a replacement.
Ask your Realtor about the market conditions in your neighborhood before making a decision to buy or sell.
Trust an expert … call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker and the spokesman for the Coeur d’Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d’Alene Association of Realtors, 409 W. Neider, Coeur d’Alene, ID 83815 or by calling (208) 667-0664.