We previously reported that a shortage of homes for sale in the starter and trade-up home markets is driving prices up and causing bidding wars, creating a true seller’s market. At the same time, in the premium home market, an over-stock of inventory has started to see prices lower and put buyers in the driver’s seat, starting a beginning of a buyer’s market.
Last week, the National Association of Realtors put out their Existing Home Sales Report which shed some light on the impact of inventory levels on sales in each price range.
The chart below shows you the year-over-year difference in sales at each price range.
The under $100K range shows declines in the last couple of years due to the small amount of distressed homes available for sale (just 5% of sales this past month, compared to 35% in January 2012). Sales in the next two price ranges are being slowed down by low inventory as buyers compete for the same home.
NAR’s Chief Economist, Lawrence Yun, said:
“Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”
The biggest surprise? This is the first time in many years where the $1M and higher price range had the biggest jump in sales when compared to last year and to all other price ranges (29.1%)! The two price ranges below the $1M range came in a close second and third. As the price went higher, so did the sales! This showing the premium home market sales is on the rise.
Yun commented, with additional inventory available in the higher price ranges, and with the economy improving, a lot of luxury buyers are finding their dream homes easier.
“The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level.”
If you are one of the many homeowners who is looking to sell your starter or trade up home and move up to a luxury home, now is the time!
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