Spring Housing Market Shows Signs of Life Amidst Challenges
Despite the persistent challenges in the housing market, there are encouraging signs of increased activity among home sellers and a slight uptick in Pending Sales in the Capital Region. Pending homes, often seen as an early indicator of existing home sales, showed a promising 4.1 percent increase in March.
Last month, good news was delivered to sellers, with the percentage of the original list price being received at sale rising to 98.3 percent. Sellers receiving near-list prices and days on the market falling to 39 may have brought about a modest increase in newly listed homes (0.5 percent compared to the previous year). More than 11,000 showings occurred throughout the Capital Region in March, indicating a slightly more active market despite the cold, wet Spring.
Who’s selling? According to Dr. Jessica Lautz, NAR deputy chief economist, “Baby boomers continue to dominate the home-selling market as they make pivotal decisions regarding their retirement living situations, whether it’s right-sizing or moving closer to loved ones.”
Inventory levels increased slightly, landing at 1.7 months (1,425), marking a 5.6 percent decrease from the previous year. Historically, demand rises as the spring selling season kicks off, leading to price increases. Limited supply has driven the median existing-home sales price up by 8.6 percent year-over-year to $290,000.
Nearly 100 new construction homes came on the market, with 56 hitting pending status and 37 closing at a median price of $551,053. Nationally, the median existing-home price in March was $393,500, up 4.8 percent from the previous year, making the Capital Region’s home prices a comparative bargain.
GCAR Chief Executive Officer Laura Burns commented, “Depending on the timing of projected positive shifts in inflation, employment, and economic growth, the Federal Reserve will most likely react with cut rates once or twice before the end of this year.”
Who will be buying? The National Association of REALTORS® reports that millennials have surged ahead to become the largest group of home buyers, marking a significant shift in the housing market’s demographic landscape. The NAR report surprisingly underscored a rise in first-time buyers across generations, with 32% of all buyers purchasing for the first time, an increase from 26% last year.