March was somewhat of a mixed bag for home sales. New home sales were way up. Of course, where else could they go with no building the past few years? Median price was up 15% over last March. Don’t get too excited though. This is more a reflection home mix where higher end homes were selling and the low-end has been pretty much absorbed.
Overall, the numbers are not so encouraging. The number of homes sold is down 5.8%. That number represents the second lowest for the month of March in 20 years. Limited housing supply and tighter credit standards are being blamed. For me, it is simply a reflection of sellers feeling they can wait and prices will, once again, reach higher levels. I think most of those sellers had hoped that time was coming sooner than it has. With prices stagnant and interest rates remaining low, there is no real motivation for buyers to rush out and get something while they still can. The run up in prices last year happened too quickly and some think we will see a softening.
Another factor may be the IRS. With taxes over, some expect an uptick in home activity. Also, rents are climbing and that should motivate some more buyers fairly soon. Even with supply up 29% over January, we are still in a starved market where buyers are being selective about the homes the homes they buy and compromising isn’t on the table. If your home is nicely upgraded, it will sell quickly. If not, it could sit for a while.
