Bidding Wars to Heat Up This Spring

Likely to be a hallmark of this year’s spring homeselling season: Bidding wars. 

As home listings are
scarcer and buyer demand remains high, home shoppers are finding a lot more competition this spring. 

“Home buyers are going to find this spring that, in a lot of markets, the inventory of homes priced and sized at price levels they were hoping for will be very limited, Even “unlikely places are getting significantly tighter.” 

An improving job market, growing consumer confidence, and the threat of rising mortgage rates have Americans flocking to housing. But many markets remain tight for listings. Housing starts remain well below levels prior to the recession and are geared more toward the higher end of the market. Homeowners also are reluctant to sell their existing home because they’re unsure of where they’d move to with the dearth of listings.

“People need to get their houses on the market, but they’re gun-shy,” Tanya Craig, an associate broker, told Bloomberg. “Unless they know where they want to go, everyone is hesitant.” Home buyers certainly aren’t being hesitant, if they can find a home they want. They’re in a rush for financing too. The 30-year fixed-rate mortgage has risen by more than half a percentage point since November 2016. The Federal Reserve last week voted to increase its benchmark interest rate by a quarter point and strongly hinted it would do so two more times this year.

The 30-year fixed-rate mortgage is expected to increase to 4.7 percent by the end of 2017 and could reach 5.5 percent next year, according to Lawrence Yun, the chief economist for the National Association of REALTORS®.  “In today’s market, many buyers think the trough in rates is over,”  Rates will be higher, prices will be higher, and maybe inventory selection will be lower. 

To learn more about how local and national statistics can impact your overall goals, call me today and visit my profile page on.  Whether your market is hot, not, or rising, I can provide guidance and advise you on what you need to know.

All-Cash Sales Falling Nationwide

All-cash sales are on the decline, accounting for 32.4 percent of total home sales in November 2016, down 4.5 percentage points year over year, according to CoreLogic's most recent housing data. That's a significant drop from January 2011, when cash sales were at their peak: a whopping 46.6 percent of all home sales nationally. CoreLogic experts predict cash sales will fall to a historical norm of about 25 percent by mid-2017.

Cash sales are most common in the REO market (60.2 percent of REO sales were cash in November 2016), followed by resale homes (32.3 percent), short sales (31.9 percent), and newly constructed homes (15.5 percent), according to CoreLogic. REO sales have been steadily declining since their peak in January 2011, which helps explain the overall drop in cash sales.

The state with the largest number of cash sales in November was New York, at 47.4 percent of transactions, according to CoreLogic. Other states with elevated percentages of cash sales include Alabama (47.3 percent), Michigan (44.1 percent), Florida (42.4 percent), and Indiana (41 percent).