Weather-related events have put a damper on the conditions ideal to make home sales during February, yet buyers have shown determination toward achieving their homeownership goals. The market is showing signs of waking up from the winter hibernation.
According to the National Association of REALTORS®, in February home sales nationwide experienced the largest month-over-month gain since December 2015. Compared to January 2019, February saw a rise in pending sales. The same is true for the Capital Region. February posted 815 Pending Sales compared to just 757 in January. Closed Sales increased 2 percent from February 2018 to 595 for the month.
Mortgage rates have declined decisively. The average 30-year fixed mortgage rate is at its lowest since February of last year. While these low rates will certainly get the attention of prospective homebuyers, the supply of homes for sale remains stubbornly low. Supply will typically go down when sales are up and inventory struggles to keep pace which should begin to impact prices. Inventory levels market-wide decreased by 4.5 percent to 4,240 units. On the year to year comparison, New Listings fell 10 percent from February 2018 to 1,047 for the month.
Greater Capital Association of REALTORS® President, Jay Christiana, Berkshire Hathaway Home Services, Blake REALTORS®, commented, “New construction is often part of the solution for a market facing inventory concerns but in our region, housing starts have not kept up with the demand.” Capital Region new construction fell by 14 percent last month as compared to February 2018. “In order to remedy the inventory situation we need to get more sellers in the market or get more homes under construction,” Christiana said.
As a result of the current market, prices are expected to continue to rise in the face of strong demand and competitive behavior from a growing buyer pool as the spring thaw comes into play. GCAR CEO, Laura Burns, reported that “Prices are showing a slight uptick against this time last year. The Capital Region’s median sales price increased 1 percent to $209,000 over February 2018, but a $3,000 increase over the January 2019 median sale price.”
Housing markets have proven to be resilient despite predictions of a tougher year for the industry. It is still too early to say how the entire year will play out, but economists and Realtors remain positive.