Home Buying Season Shaping Up

imagesPP39YVA8The majority of housing markets are entering the 2014 home buying season in significantly better shape than they were one year ago.  The outlook for a more abundant, more affordable selection of homes for sale this spring improved considerably in February.  This is signaling growing seller optimism and a strong, early start to the spring home-buying season. Sellers in most markets are responding to the price increases of the past year, suggesting they are increasingly optimistic about the housing recovery and the underlying strength of market demand through 2014, according to the latest February data from realor.com.

While February inventories remain low by historic standards, following seasonal patterns, they will probably continue grow over the next two months with the coming of spring. With the spring buying season around the corner, inventories of new listings are growing. Despite the increase in inventory, the median list price jumped by more than 2 percent in February. These list price increases are another sign of seller confidence going into the selling season as sellers price their homes in anticipation of market conditions in the coming months.

There are positive signs that the market is more balanced and that we will not see a repeat of last year’s overheated markets, soaring prices and multiple bid situations. On a year-over-year basis, the median list price and the size of the for-sale inventory were up by 7.57% and 10.14 percent, respectively. Record low inventories last January set the stage for a selling season featuring soaring prices, bidding wars and the outbreak of price bubbles in several California markets. The improved conditions for sellers prompted many to list their homes, but not enough to measurable improve the inventory picture as real estate markets go into hibernation to prepare for the 2014 season.