Home Sales Expected to Soar Through 2018: What Buyers Need to Know

By now just about every would-be buyer out there knows there simply aren’t enough homes for sale these days to appease the hordes of competition. But despite the shortages, rising prices, and bidding wars, more homes are expected to be sold this year than in more than a decade.

In 2017, the number of sales of existing homes (which have previously been lived in) is expected to rise about 3.5%, to 5.64 million, according to the midyear forecast from the National Association of Realtors®. The group predicts that existing-home purchases will rise an additional 2.8% in 2018, to 5.8 million.

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Predictions Roll in: 2017 Housing Forecasts

Thoughts

We can expect a hot year for home sales in 2017, according to recent forecasts from the National Association of REALTORS®, the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae, and more.

NAR is predicting existing-home sales to reach 6 million in 2017, higher than its 5.8 million forecast for this year. But other entities are even more bullish. MBA is predicting home sales to eclipse 6.5 million next year, while Fannie Mae and Freddie Mac are both predicting 6.2 million.

A huge wave of Generation Yers, who have delayed home buying, are emerging into their key buying years. They are predicted to keep home sales and condo sales strong well into 2020, according to economists.

The top markets for price appreciation likely will be in Seattle, Wash.; Portland, Ore.; Denver, Colo.; and Boston, predicts Eric Fox, vice president of statistical and economic modeling at VeroForecast. These markets’ robust economies have growing populations but a tight supply of homes for sale on the market that will likely lead to some of the largest price increases across the country.

Meanwhile, new-home construction starts likely will tick up to about 1.5 million per year to 2024, predicts Forisk Research.

Home builders likely will continue to be more subdued, despite calls for more inventory.

“Home builders behavior likely is a continuing echo of their experience during the crash,” Pantheon Macro Chief Economist Ian Shepherdson told MarketWatch. “No one wants to be caught with excess inventory during a sudden downshift in demand. In this cycle, the pursuit of market share and volumes is less important than profitability and balance sheet resistance.”

Source: REALTORmag

Existing-Home Sales Rise in June as Home Prices Surpass July 2006 Peak

Proceeds from Sale

Existing-home sales increased in June to their highest pace in over eight years, while the cumulative effect of rising demand and limited supply helped push the national median sales price to an all-time high, according to the National Association of Realtors. Sales are now at their highest pace since February 2007, have increased year-over-year for nine consecutive months and are 9.6 percent above a year ago. The median existing-home price in June surpasses the peak median sales price set in July 2006. June’s price increase also marks the 40th consecutive month of year-over-year gains. Unsold inventory is at a 5.0 month supply.

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Inventory Problems Stall Home Sales

Pending home sales dropped in December, despite interest rates being at the lowest levels in more than a year, the National Association of REALTOR® reports. All regions across the country posted declines in December.

In December, pending home sales nationally fell 3.7 percent month-over-month. Still, NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, remained about 6 percent above year-over-year levels for the fourth consecutive month.

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NAR Chief Economist Reveals 2014 Predictions

Graph - up

Speaking at the 2013 Realtors Conference & Expo earlier this month, National Association of Realtors (NAR) chief economist Lawrence Yun predicted steadiness in existing-home sales over the next year as prices continue to ascend.

Over the past two years, Yun says existing-home sales have shown a 20 percent cumulative increase, while prices have gained 18 percent. Meanwhile, incomes have only barely risen, coming up somewhere between 2-4 percent.

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Housing Activity “speeding along,” but Pace Slowing as Seasons Change

September tested the housing market’s resilience around Western Washington with fluctuating mortgage rates, record-setting rains, and persistent inventory shortages in some areas. By month’s end, however, both pending and closed sales outgained the same period a year ago, according to the latest figures from Northwest Multiple Listing Service earlier this month.

Prices also increased compared to 12 months ago, but fell slightly from the previous month. Year-to-date figures through nine months show prices for homes and condominiums that have sold in the 21 counties served by the MLS are up 12 percent from a year ago.

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Demand for Puget Sound area Homes “Still Incredibly Strong”

… but brokers report frenzy is easing in some neighborhoods.

Earlier this month the Northwest Multiple Listing Service reported that figures for August show brisk sales, escalating prices and some improvement in inventory, prompting one MLS director to declare, “What these numbers tell us loud and clear is that buyer demand in the Puget Sound region is still incredibly strong.”

In making that comment, OB Jacobi, president of Windermere Real Estate, noted the housing market tends to experience some slowing during August, but rising inventory levels and sustained buyer demand fueled “higher than expected home sales and another month of strong appreciation.”

The latest figures from Northwest MLS show pending sales (mutually accepted offers) during August increased 8.7 percent from a year ago. Brokers in the 21 counties served by the MLS reported 9,065 pending sales system-wide. That’s a drop of 500 units from July, but an increase of 727 transactions compared to a year ago (August 2012). In the four-county Puget Sound region (King, Kitsap, Pierce, and Snohomish), the total of 6,916 pending sales was the highest volume for August since 2006 when members notched 7,692 sales.

Prices also reflected an upward trajectory. The area-wide median price for last month’s completed sales of single family homes and condominiums was $283,000, which compares to the year ago figure of $250,000 for a gain of 13.2 percent. Only two other months this year have had higher year-over-year increases: March (14.9 percent) and May (13.4 percent). Since January, prices have jumped 18.3 percent.

Prices on single family homes (excluding condos) that sold during August increased from $263,495 to $294,000 for a gain of 11.6 percent.

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