Real estate activity during the first half of this year has been mixed: on one hand, we've heard that housing has been down this year but recent data shows that starts are beginning to see an uptick and that in May, existing home sales increased 1.1% year-over-year.
But the real news is that median housing prices are going up dramatically, fueled by some of the lowest inventory we've seen in quite some time. Diana Olick, from CNBC states that there's only a 4.2 month supply of homes in many parts of the country (6 months is the norm for a balanced market) and that's creating an uptick in pricing while locking out many first time homebuyers. Click here to see Diana Olick's most recent observations about the national real estate market.
Merrill Lynch has also observed a downturn in real estate sales nationwide so far in 2017. Some possible explanations are:
Homebuyers are in "wait and see" mode,
Millenial Generation & first time buyers have been priced out of the market, and
Difficulty for 25-34 year-olds to obtain a mortgage given their high student debt
Click here to read the most recent Merrill Lynch Housing Watch report.
On a local level, we're seeing the same pressures that are well documented on a national level as home prices have surged due to limited inventory. Properties under $400K are "out the door" according to one local real estate agent. While activity in the mid-to-lower markets has been bouyant, the upper end of the market has been soft throughout the waterfront condo, country club and single family home sectors. Click here to read more details from a Sun Sentinel article that was recently published. GL Homes, a prominent local builder has found the "sweet spot pricing" for new construction. Sales at Dakota have been incredible while many higher-end new communities are flagging.
With stability at the lower end of the real estate market, we're hoping that there will be some upward movement in buyer demand during the summer months and beyond so that our local market is better balanced market across all price points. Some authorities have predicted a "bounce back" and expect real estate sales to be better during the second half of the year but that remains to be seen.
Please call us for if you'd like to visit any new construction models or simply want to know about the value of your home. We can provide you with an easy to understand analysis of values in your neighborhood. Wishing you a safe 4th of July holiday weekend and an enjoyable summer.
Dan & Linda Tublitz
For more information please contact us at [email protected] or 561.289.0289
