CLARK: In need of listings for buyer demand

Buyer demand continues to exceed the inventory of available homes for sale explaining why existing-home sales slowed in April. In some markets and in some price points, this is putting upward pressure on home prices. The Midwest region was the exception, reporting an increase in home sales. Total existing-home sales (all types) decreased 3.3% to a seasonally adjusted annual rate of 5.04 million in April according to the National Association of Realtors (NAR). Home sales, however, are up about 6% since last year.

NAR’s contention is that with low interest rates and job growth, an increasing number of buyers will be encouraged to enter the real estate market unless home prices rise more than income.

Regional results:

Northeast — home sales decreased slightly over 3%, but are 1.6% above a year ago. The median price increased 3.6% as compared to April of 2014.

Midwest — home sales increased 1.7% and are 13% above a year ago. The median price increased 11.4% as compared to April of 2014.

South — home sales decreased 6.8% and are 3.6% above a year ago. The median price increased 8.5%  as compared to April of 2014.

West — home sales decreased 1.7% in April, but are still 6.4%  a year ago. The median price increased 10 percent as compared to April of 2014.

According to NAR, inventory is very tight and is causing bidding wars, faster price growth and properties selling at a faster rate. Approximately 40% of properties sold last month at list price or above list price.

Inventories of homes for sale increased slightly (10%) at the end of April, but are below last year levels. Existing inventory is at 5.3 month supply at the current sales rate.

Homes sold faster in April with the average time on the market of 39 days. Almost 50% of the homes on the market sold in less than a month in April. Of those, short sales were on the market for the longest period of time or 180 days; and foreclosures sold in 50 days and non-distressed homes were on the market 38 days.

Distressed sales (short-sales and foreclosures) made up 10 percent of home sales in April and were down 15% from the prior year. Foreclosures sold for an average discount of 20% below market value and short sales sold for an average discount of 14%.

The number of all-cash transactions accounted for 24% of sales in April. This market segment remained about the same since March, but down significantly from a year ago when cash sales represented 32% of transactions.

Individual investors who account for the majority of cash sales purchased, constituted 14% of homes in April – down from 18%  in 2014. According to NAR 71% of investors paid cash to buy a home in April.

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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