With the notable slowdown in home sales at the start of this year, there was general apprehension that the housing market was hitting a rut.
Much of the concern seemed to center on whether or not the release in pent-up demand that was unleashed after the recession had finally run its course. This, coupled with the still hazy financial futures of younger buyers, looked set to produce a mediocre 2014.
But They Were Wrong…
That being said, it looks like things are picking up with the start of the home buying season. According to a new report from the Los Angeles Times, existing home sales climbed in April, the first month-over-month climb recorded this year.
This occurred concurrently against a monthly rise in sales inventory, which could account for much of the rise in sales. Certain regions within the greater American housing market have seem home values rise so sharply that entire demographics of potential buyers have been pushed from the table.
Granted, sales are still down some against the figures tallied in April 2013. Overall, signs point to nationwide home sales being lower than that recorded in 2013.
Lawrence Yun, the chief economist of the National Association of Realtors, was quoted as remarking that sales in Q2 of this year would likely be markedly less than that recorded in Q2 2013.
Overall, we seem to be observing typical seasonal trends at a suppressed rate. Sales are indeed picking up with the coming of the pre-summer phase, but the lapse in home sales throughout Q1 may portent a softer year overall.
What Will This Mean for Home Values?
Overall, we’re looking at a year thus far where home sales are climbing and slowing in small cycles.
The decreases in January, February, and March were relatively small, and the comparative rise in home sales recorded last month was relatively incremental as well. This might portend a year where the change in home prices remains more stable against the sharper gains that were witnessed throughout 2012 and 2013.
The issue here is that the surge in prices last year has forced buyers from the table, and may continue to do so throughout the rest of the year. There seem some questions on whether or not this will result in long-term stagnancy.
This wouldn’t likely cause a rupture in the housing market dramatic enough to cause sever price fluctuations, but it is a troubling equation going forward.
Price uncertainty and sales momentum seem the biggest quandaries facing the housing market through the remainder of the year, and the seesaw between receding home prices and the number of buyers who can afford listed prices could only complicate matters through Q3 and Q4.
How do you predict the outcome of overall house sales for this year?
Be sure to leave your thoughts and comments below!