The 2014 home buying season may have gotten off to a staggered start, thanks to extended winter weather that hampered showings and sales during the first quarter, but the prognosis for the year remains promising.
Data recently released by Realtor.com revealed that a convergence of factors should signal a resurgence for the housing market - one that is becoming increasingly favorable for home buyers - over the final three quarters of the year. The March National Housing Trend Data noted that property value appreciation rates are easing and will continue to do so, helping foster a healthier and more sustainable national market. Also improving affordability will be more inventory, which is especially necessary to help cool prices in some of the country's major coastal metro markets, such as the Bay Area, Boston, Los Angeles and San Diego. Thanks to the accrued equity of many homeowners who are now in position to sell, as well as constructed rates that are expected to pick up with the warmer weather, there should generally be more options out there for prospective buyers.
â€‹Competition cooling, options expanding
HousingWire reported that first-time buyers, especially, should benefit from the newfound inventory. Many such shoppers were squeezed out of the marketplace in 2013, either as a result of budgetary limitations or because they were in competition for a small supply of houses, often against large-scale investors who carried cash in hand.
The Realtor.com data found that the number of properties for sale in March was 9.5 percent greater than the available inventory from March 2013. The median price for the 1,841,844 units was $199,900 - up 5.3 percent on a year-over-year basis - but that the median age for that inventory was up 22.9 percent on the same annual scale, to 102 days on the market. The latter figure is perhaps most promising for would-be buyers, since the longer homes tend to stay on the market, the more likely they are to be priced affordably. Furthermore, most indications are that those institutional investors who so dominated the market during 2013, particularly in places like California, Arizona and Nevada, are scaling back their influence.
"Housing price appreciation [is] already on the decline, with only six cities in the Case-Shiller index showing strength in recent indexing - Dallas, Las Vegas, Miami, San Francisco, Tampa, and Washington," Tom Showalter, chief analytics officer at Digital Risk, told HousingWire. "There is little evidence that they typical retail buyer will up the slack."
Taking time to ensure a practical purchase
While that trend may not be music to the ears of current owners looking for further equity gains, it certainly plays into the hands of the house hunter seeking some price easing, as well as relief from the aforementioned competition. That could mean first-timers seeking to expand their search or transplant shoppers, whose options may have been more limited previously. The Realtor.com report anticipates that more options and more sellers - not to mention still manageable mortgage interest rates by historical standards - should lend to a gentler environment for all eligible buyers.
Of course, with more inventory on the market there will be less pressure and more time with which consumers can make such an important decision. In doing so, it's essential that home buyers, first-time or otherwise, not overlook the importance of a home inspection. Whether of the new home construction inspection variety or for the purpose of condo & townhome inspections, identifying potential structural issues within a home can make or break an investment. And now, with more affordable residences available, there's no excuse for not taking the proper precautions and ensuring a property is in sound condition.