Few Sellers, Many Buyers, Causing Real Estate Prices to Rise
Throughout 2013 home inventory was low, with many more buyers than sellers. The result once again proves the law of supply and demand always rules. When the supply of anything does not equal the demand for it, the price rises.
Average home prices increased 13.4 percent in 2013 according to the Standard & Poor/Case-Shiller index, but to date home sellers have yet to respond with more listings. The beginning of the typically active spring market has not seen a dramatic increase in more homes for sale. Inventory is increasing, but predominantly because of the sales volume slow down, leaving homes on the market somewhat longer than during 2013.
Observers still predict rising mortgage rates in 2014, although they’ve been remaining low, even declining during the beginning of April, according to respected real estate database, Zillow. If the combination of low inventory and increasing mortgage rates occurs, buyers may face challenges finding financing for the homes they want.
The most recent jobs report did not help, as job gains were positive, but not at the level the market expected. This may help explain the interest rate decline in early April. However, it hasn’t yet translated to more homes for sale.
If you’re considering buying or selling a home in the Bay Area, contact The Zwahlen Team in Danville to get up-to-date information and valuable advice. Barry and Brenda Zwahlen have helped hundreds of hundreds of buyers and sellers reach their real estate goals. Along with offering considerable expertise, The Zwahlen Team delivers outstanding customer service to their buyers and sellers.