May 6th, 2013 9:43 AM by Nick Rapplean
ZipRealty put out a report a little over a week ago that suggested the number of homes coming to market in various parts of the nation was beginning to catch up with buyer demand. The report was described in an article by Julie Schmit in USA Today. Her opening sentence said, the supply of newly listed homes for sale is starting to show signs of keeping pace with buyer activity in some of the nation’s hottest real estate markets, new data suggest.
Is it just me, or is there something a bit strange in the fact that this was the only news article I could find on the subject...anywhere (other than in a quick NAR summary)?
The article asserted that new listings outnumbered new sales from mid-February to mid-March in 21 of 24 major metropolitan markets tracked by ZipRealty. In Los Angeles, for example, 16,170 homes were placed on the market and, during the same time period, 9,533 homes entered sales contracts.
Overall, the supply of homes available for sale in our nation stood at 4.7months in February, up from 4.3 months in January. This is not to suggest that the market is slowing, though. In seven of the major metropolitan areas followed by ZipRealty, more than 25% of the homes for sale sold in less than seven days. (Were speaking here of Las Vegas, Orange County, Sacramento, Denver, Washington DC, Seattle, and Austin.)
Now, given how few homes there have been on the market awaiting, in many areas, armies of potential homebuyers, you’d think that the newspapers would be full of speculation about the changes many markets are undergoing. Years ago, most real estate offices displayed a sign in their windows that said, we need listings. It often seemed a bit like a used-car-lot greeting - "Here to buy a car today?" But the fact is, we have REALLY needed listings over the past year. The lack of them has kept a lid on the sales of new homes and has quite possibly slowed the construction of more new homes.
So here we have a bigger crop of listings- reason for cheer- and the markets and news media are remaining very quiet about it. We do understand that a few pieces of data do not make a trend, and that we need new listings to continue to sell as quickly as they reach the market.
Nonetheless, what can we make of the relative silence over this good news?
If you scan the home-building industry, you see that a great many companies disappeared during the real estate recession. Even those that remain, other than the biggies, which are already starting to make large amounts of money in this recovering market, have carefully-developed cautionary habits. They learned to run their businesses on shoestrings, to build as few homes as possible, too avoid any overly optimistic assumptions about the state of the industry. (Thus, we see the NAHB Housing Market Index, which measures the mood of builders, very often inclined to dip and to display its own skepticism of apparent market strength.)
Still, there may be a large problem that awaits those who don’t enter this market aggressively and soon. They may miss the boat and, just as they were formerly chasing a dwindling marketplace, trying to stay alive, they could wind up chasing a speeding marketplace, trying to maintain enough inventory to satisfy demand.
This is good news, all in all, but an improving market requires a nimbleness of foot as surely as does a declining market. May your experience of the markets revival prove very enriching!