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The law of supply and demand is in full swing in the housing market on both a national and local level. Nationally, the Pending Home Sale Index (PHSI) for January 2017 reached its lowest level in a year* and tight inventory is the prime culprit.
Locally, the housing market has seen a steady increase in housing sales. According to the Mid Hudson Multiple Listing Service, the 12 month average for “Closed Sales” of single family detached homes, is up 16.3%. The average for “Pending Sales” is up 19.5%. Conversely, the 12 month average of “New Listings” has decreased by 10.2%. While the lack of new listings has not affected the local market in amount of sales taking place, it has had an impact on sales prices.
Normally, less homes being listed for sale and greater demand is the recipe for higher prices. Locally the median sales price and the average sales price are have both slightly increased by 1.2% and 2% respectively**.
So, why aren’t these sales prices rising faster? Here are a few: Is the market clearing out lower priced foreclosures or short sales. Are prices being held down by a person’s borrowing power based on local employment data? Is it simply that we are not in a full spring market yet and higher priced, quality inventory is waiting to be released into the market? Has the mood of the country changed and given people pause in making larger financial decision such as buying and selling?
The fact is that all of these are having an affect at this time, how much one or more have over others is nearly impossible to calculate without much deeper data to analyze. What we do know from both closed sales and pending sales data along with almost daily contact with local realtors, is that the demand is robust. The constant theme I hear from realtors is “I have lots of buyers and not enough homes to show them”.
The law of supply and demand will have an affect on prices. If the current 12 month trends continue we will continue to see prices rise. This then, has a positive effect on potential listings since values will have increased and people will be gaining equity in their homes. Sometimes this creates enough equity to make it advantageous to sell, creating another listing which can then help fuel the purchase market further.
Is it a great time to list your home? Only you know the answer to that question. But knowing the market trends can certainly help you make the right decision.
* Mortgage News Daily, Feb 27th, 2017
** Mid Hudson MLS, February 2017 Monthly Indicators