Love it or list it

According to Realtor.com, the number of homes for sale has increased 25% and housing inventories have still outpaced seasonal increases.

The reason for this is rising home prices. More sellers are willing to try selling their homes. The number of homes listed for sale has risen 5.8% in May when compared to April.

Nonetheless, the number of homes for sale (there were 1.85 million homes listed for sale in May) is still 10% below where we were a year ago. Inventories in 15 of 146 markets were above prior year levels in May. The areas where the number of homes for sale rose the most were Atlanta, Ga., which increased 3.4% in May; Miami, Fla., which increased 2.8%; and Tuscon, Ariz., with a 1.8% increase. Not all markets are experiencing increases in inventory.

Thus far this year, inventories have increased about 375,000 through April as compared to increases of 45,000 for the same time period in 2011 and 108,000 in 2012. The increase, however, is still lower than the increase of 442,000 in 2010 when tax credits caused an increase in housing demand.

Another report released by Zillow indicates that inventories at the beginning of June fell 12.2% when compared to being down with a year-over-year decrease of 17.5% in January.

Inventories have fallen over the past two years as distressed properties have slowed and investors have purchased more homes to rent. Sellers, however, have held onto their homes because they are not willing to sell for less than what they owe or paid.

A Fannie Mae survey revealed that 40% of Americans believe it was a good time to list their property. This is up from 30% in April. Sales have been down over the past year because of a shortage of listings.

Across the country, median list or asking prices increased by 4.8% from the previous year and by 2.1% since April of this year. Asking prices were above last year’s levels in 112 markets. Some of the markets where listing prices have fallen include Sacramento and Oakland, Calif., Springfield, Ill., and Little Rock, Ark.

Approximately 50% of all homes listed for sale at the start of May had been on the market for less than 79 days.

In determining whether to sell, consider that buyers are looking for areas that enhance their quality of life.

They are looking for good schools, as this feature has been tied to strong home values. Buyers look more closely at location characteristics during times of tighter housing values. Also, an easy commute will drive home sales. There are three broad-brush gauges to see how well a neighborhood compares to others in the area: price increases, days-on-market for homes to sell, and inventory of properties for sale.

If you are underwater on your mortgage or have 20% or less equity in your home, your options are rather limited.

Renovating may be the better choice. This is provided it will cost you less than moving to another home and the renovations will satisfy your needs. Assuming this is the case, that you plan to stay in your home for at least five years, and that you can do the renovations without getting a loan, it is the better choice for the long-term value of your home.

Renovations do not have to include the best and highest-priced materials and appliances, as you may not recover the investment. When considering renovations, find out first whether they are doable with Planning and Zoning. Another important consideration is whether the existing structure can handle your desired renovations including sewer/septic, electrical and other systems. Surprises and changes can be costly.

 

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected]

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