February Market Update - The Housing Market is Revving
Published | Written by Pamela Briggs
With the holidays in the rearview mirror, the 2020 housing market is revving its massive engine.
It's hard to believe it is only February. The green light just went on and the market is already propelling down the racetrack at an amazing speed. It was just a year ago that housing was moving a long at a much slower pace. Buyers were taking their time and it definitely was not a race to purchase. Mortgage rates were at 4.5%, eating into a buyer’s motivation to find a home.
Fast forward a year later and there is no lingering inventory from the prior year. Interest rates are at 3.75%. The low interest rate environment is the rocket fuel that is propelling the market down the dragstrip. Multiple offers are once again the norm. Homes that are priced well and in good condition are selling quickly.
Everything priced right (not overpriced) and is below $750,000 is a Seller’s Market. It all boils down to supply and demand. Current demand is extremely strong, and the active inventory is at exceptionally anemic levels. Compared to last year, there are 33% fewer homes on the market right now, and demand (new pending sales over the prior month) is up by 15%.
The only thing holding back demand right now is that it is only February and not that many homes are coming on the market. Even in California it is still winter. Demand will continue to climb as more and more homes come on the market, peaking between April and May. Sellers who opt to sell now, versus waiting until later in the spring, are taking advantage of a market ripe for the pickings. Carefully pricing a home according to its Fair Market Value, taking into consideration condition, location, and upgrades, will result in selling quickly and at, or even slightly higher, than the asking price. Stretching the price too much will result in wasting the most valuable market time, the first few weeks after coming on the market.
For homeowners waiting to place their homes on the market in the spring, there will unquestionably be more buyers looking to purchase; however, there will also be a significant increase in the number of sellers coming on the market. The Expected Market Time typically starts to rise in April as the number of new FOR SALE signs outpaces the rise in demand. One thing is for certain, right now is a really good time to place a home on the market, just as the housing market is putting the “pedal to the metal.”