Spring Housing Already Overheating-
The spring housing market started early this year because of hotter-than-average demand and overheating home prices.
“This spring housing market is shaping up to be another doozy for homebuyers,” said Ralph McLaughlin, chief economist for home-listing website Trulia. “Housing affordability is the key to helping break yet another year of gridlocked inventory, but all signs are showing that homes this spring will be much less affordable than last year.”
Here are 7 reasons why this is happening
1.Affordability. Entry-level homes are scarce because investors bought tens of thousands of them during the crisis and turned them into rentals. The number of single-family rentals jumped to more than 15 million, up from about 11 million in 2009, according to the U.S. Census.
2.Homebuilders are operating well below normallevels because of higher costs and a lack of labor, and thousands of construction workers left the business during the recession, never to return. Builders don’t focus on entry-level homes because the margins are simply too tight, and prices for new construction are also rising at a fast clip.
3.credit is still tight, and the youngest cohort of buyers, the millennials, are delaying marriage and parenthood, the two biggest drivers of home ownership. The shortage of homes for sale has now pushed prices to a 30-year high, according to S&P CoreLogic Case-Shiller. Rising mortgage rates only add to the pressure.
At a Sunday open house in Los Angeles this weekend, nearly a dozen house hunters showed up before the scheduled start. The three-bedroom, two-bathroom home was reasonably priced, in a desirable neighborhood and move-in ready.
“Typically for a home like this we would expect to see upwards of15 to 20 offers,” said Fabrizzia Perri, the Redfin agent showing the property. “Recently, I was at a similar listing that had 66 offers on it, of course only one person wins, so 65 homebuyers have to restart their home search.”
4.Housingdemand climbed considerablythis year, even compared with last year, Compared to January 2016, homebuyer demand was up 23 percent, led by a 26 percent annual increase in homebuyers requesting tours and an 18 percent increase in buyers making offers. As mortgage interest rates rise, people are looking to jump on the bankwagon before they go even higher
5.Soaring stock markets give a feeling of prosperity
6.still-low mortgage rates,
7. a steady economyimproved Economy and employment continue to improve
., Los Angeles, Miami and Tampa, Florida, are close to 10 percent overvalued.
So if you want to be a birddog, this is the time to get out there. Investors like me are starving for deals.
