After peaking in September and matching 2012 levels, Active Listings have seen the seasonal decrease into yearend. This is quite encouraging since listing could have easily kept increasing from the historic lows seen in 2012. Typically listings don't pickup until March signalling the start of "Selling Season". Even though inventory levels are only 250 homes away from the record low last year, it seems unlikely that inventory will drop that low during 2014.
2013 Closings beat 2012 every month until petering out into yearend. The interest rate spike in May and June may have prodded many fence sitters into buying resulting in the strong sales during the Summer. Brisk September/October sales suggest interest rates aren't the only factor in sales rates. Should the market produce sales above 2,200 in January/February inventory will remain depleted setting the stage for price increases. December's Months of Supply at 1.05 serves as a reminder of tight inventories.
In 2013 record low inventories coupled with increasing buyer interest pushed Case-Shiller prices up 14% last year. After peaking in July prices leveled out thru October. With weaker sales in November/December and ample inventory, Case Shiller prices ought to drift lower in November/December. If inventory remain scarce into the Spring, prices are poised for another run up in 2014. 14% increases won't be seen as interest rates will continue to upside appreciation. 7% wouldn't be surprising.
2014 ought to be a good year for Builders/Flippers that can bring inventory to the market during the Selling Season. Waiting until the Spring to set prices may be a profitable decision.
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