Where is the spring market headed?
Although it’s snowing and 2 more snow storms are coming this week, spring is most definitely on it’s way and with it the spring market in real estate. The question I’m asked is How will the market do this spring?
The short answer is that the real estate market has been terrific and is poised for a very strong spring and summer. Let’s look at the facts.
Today there are 2,415 homes for sale in the New Jersey MLS and 1,054 under contract for a 2.3 to 1 ratio. A ratio of 2 to 1 is a strong seller’s market.
Comparing 2014 to 2015 for the first 2 months of the year, 10% more homes went under contract (1,210 to 1,327) and sales accepted offers and closed faster (72 to 65 days to closing).
On February 26th FHA mortgages became much less expensive (see my 2/26 article) which adds more first time home buyers. First time buyers fuel the real estate market so anything to create more of them strengthens the market.
Interest rates are still around 4% but the public increasingly expects rates to rise; this is a motivating factor for home buyers.
Low inventory continues to push up pricing. Higher prices and a fear of rising rates propelled many buyers to take action. We had tremendous activity during this very cold and snowy winter. Customers said that they wanted to take advantage of today’s prices and mortgage rates before they go up in the spring and summer.
We have all the elements needed for a fabulous spring and summer market. We started strong, inventory is low and so are rates.
Buyers are another reason. They believe that rates and prices will only be higher in the future. They’re right if you believe all economic indicators and projections.
If you’re buying – get going now. If you’re selling – this is the best year since the start of the recession.
So where is the spring market headed? Up.