We’ve seen how buyers have reacted to the amount of inventory.
When there are plenty of choices, buyers are very deliberate in their hunt. But when the inventory dries up, especially when (or because) prices AND rates go ultra-low, buyers lose their patience and start gobbling.
The shortage of new listings last year started in late spring – let’s compare to this year to see if there is an indicator of what to expect the rest of the year:
NSDCC New Listings Between May 1 – June 15
Year | ||
2010 | ||
2011 | ||
2012 | ||
2013 |
We’ve had a few more listings this year, but, unlike last year, the 22% increase in average list-pricing will likely slow the buyer enthusiasm once school starts – if not sooner.
From last night:
Mortgage rates have seen better days.
If the past 2 months of calamitous volatility and almost daily cost hikes weren’t enough, today brings the Conventional 30yr Fixed best-execution rate to 4.25%–levels not seen since late 2011.
A move of this magnitude was one of the risks heading into today’s incredibly important FOMC events, but despite understanding that it was a possibility, it’s magnitude can still seem surreal when compared to rate offerings not even two months ago.
During that time, while we may have been historically privileged to witness 30yr Fixed Rates in the low 3’s, we’ve also endured the sharpest rise in rates of the past 10yrs.
http://www.mortgagenewsdaily.com/consumer_rates/313499.aspx
and yet it still won’t change the fact that cash will be king yet again.
From one move-up buyer and bidding war loser’s perspective, the “stall” is here. Sellers have lost their mind. Obviously, sellers can do what they want and I can understand the desire to hit the housing lottery, but the recent listings I see for large tract homes in South Carlsbad/Encinitas are beyond absurd, in many cases. Homes that sold in the 800s now being listed for $1.1 M plus. All I can say is “uncle” and wait for the new reality to settle in. Not sure its worth submitting low ball offers that are 15-25% below the listing. Who’s going to admit that they were that far off on price. I certainly don’t see pricing dropping either. Just stagnation. Just my two cents.
Yep: the mortgage market has been going bananas as of late. Since 5/1 we have lost 670bps on the FNMA30 3.0 coupon, which means that the sub-4.000% note rates have vaporized. Rates are where they were roughly 14 months ago [APR2012].
For buyers that equates to the possibility of less buying power. Once again, for the mid-to-higher purchase prices, deep pockets will prevail as they won’t be affected as much.
The higher rates should have [smart?] buyers going back to their Loan Officers to revise what LoanAmts/Purchase Prices they qualify for today.
700bps on a 750k 30frm is $300 per month.
Sorry meant 70bp!
Flesh wound(?)
I think the stall is here, but mainly because most of the inventory that was within shouting distance of reasonable has sold. What is left, and what is piling on, is shouting distance +15%. Though memories are short, I think many buyers are pausing not wanting to be the one holding the bag when the music stops. I am not saying the music has stopped, but nobody wants to be the ‘fool me twice’ guy. And anyone that says the music will never stop, well, we’ve heard that tune before. Always remeber ‘buy now or be priced out forever’.
@elbarcosr
“Always remeber ‘buy now or be priced out forever’.”
It’s more like….buy now or be priced out until the next cycle.