Home Prices on the Rise, Sales Also See Slight Increase in March

Builders, home buyers, and homeowners alike have reason to celebrate as the busiest real estate season of the year starts off in Spring, 2013.  The reason for “popping the cork” is that home inventory has been on a steady decline for 24 months in a row – a total of 32% – and counting.  Reports coming in from February, 2013, show that newly listed homes are selling on average in 14 days, and actual bidding wars are being held for some properties because the amount of new inventory on the market is not as strong as it could or should be.

There are two reasons for the inventory shortage.  New home builders, historically over the past 3 years, have been very slow to pull out new building permits. Some builders had inventory already “sitting on the ground,” costing them money.  They had to get rid of these homes and their costs before even venturing out to take on any more cost in the form of a construction loan on the chance that the new home that they built would even sell.  Builders also were running into nightmare scenarios with the banks with whom they had been long-established because the banks “hands were now tied” in being able to extend the type of credit they were able to extend in the past.

Another reason for a shortage of inventory on the home buying market is the lack of pre-owned homes.  Some people bought shortly before the recession hit in 2007, and their home values were inflated.  These types of homeowners are still waiting for the home values to rise more so that they don’t lose or “break even” on a move-up or “parallel” new home purchase.  So when properly priced homes in decent or well-prepared selling conditions did hit the market, they were, quite literally, “snatched up” by prospective home buyers.

Even with the hold-outs, home prices in February were up 13%, and sales were up 2%.  The sales rates are depressed because, believe it or not, the lack of inventory.  As the credit market loosens up, and it becomes easier to qualify for a construction loan or mortgage, sales should statistically follow the same path and start to slowly inch up over the next 6 months.

Bedico Creek Preserve in St. Tammany Parish has an offering of Homes for Sale as well as Lots for Sale.  If you are interested in taking advantage of low interest rates, ready inventory, and building a new home “just the way you want it,” Contact Bedico Creek at 985-845-4200 or E-mail [email protected] to learn more about our subdivision and building a new or custom home.

 

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