The market so far this year has exhibited some odd, maybe even contradictory, behavior.
The question is, what do you do in this situation?
Here are some cases-in-point from our friends at The Cromford Report.
1) The beginning of 2015 so far has been disappointing for sellers. We can tell you that its been tough for ours. The listings are beautiful and well-priced. But the buyers continue to sit on the fence. The only thing to do is wait and continue marketing the listings. See below for a break-down of cities and whether they are a buyer’s market or a seller’s market. The Cromford Index shows this –if the index is over 100, it is a seller’s market. Under 100 is a buyer’s market.
2) Interest rates are even lower. I spoke with one of our favorite lenders last week who told me that he was seeing 30-yr fixed rates consistently under 4%. That’s like free money almost! This will definitely prime the pump.
3) FHA financing has just gotten less expensive. This means that the sector of the market that uses FHA financing (low to moderately-priced homes) can now afford financing again. According to Mike Orr at Cromford, “The reduced mortgage insurance premiums for FHA loans are having a significant effect according to the Mortgage Bankers Association (MBA). The biggest change affected FHA refinance applications which rose 76.5% for the week ending January 30.” That’s a huge leap in activity!
4) Over-all, the market is a bit better now than it was last year. Its very similar, but a smidgen better. Again, Cromford:
“From the normal snapshot as of February 8, we can pick out the following improvements for sellers over the last 12 months:
- Active Listings (excluding UCB) – down 5% from 22,872 to 21,750
- UCB Listings – up 38% from 1,825 to 2,519
- Pending Listings – up 14% from 4,404 to 5,036
- Days of Inventory – down from 138 to 132
- Months of Supply – down from 6.1 to 5.6 months
- Contract Ratio – up from 27.2 to 34.7″
What this tells me is that buyers and sellers are uncertain. The data would say that it is a good time to make a move, but most people don’t see the data.
The advice I have for this situation is that every market has opportunities, even the worse markets. The challenge is to know how to take advantage of those opportunities. Give us a call and we can help you make a plan. 602-456-9388.