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Tuesday, March 17, 2015

The Housing Market Outlook for 2015 Is a Balanced Market

Inventory levels define the state of the housing market. It is either a Buyers’ Market, a Balanced Market or a Sellers’ Market. To determine what market we are in, ask your realtor, “how many months of housing inventory do we have?”

The Three Types of Real Estate Markets

Buyer’s Market: When there is more than seven months of inventory.

Balanced Market: When there is between five to seven months of inventory.

Seller’s Market: When there is less than five months of inventory.

Months supply of inventory loosened in 2014, helping ease price growth back to sustainable levels. We ended 2014 with 5.2 months of supply. This means that if no new listings hit the market, all the homes already listed would sell in 5.2 months.

In the last three years, we have been flirting with a balanced market and are getting closer to that reality. Balanced markets occur during the transition between a Buyers’ Market and a Sellers’ Market. So, if we are in a market marked as a transitional state, what does that mean for home buyers and sellers?

The aha: Real Estate is a Cyclical Business. Where it is Today is Not Always Where it Will be Tomorrow.

Real estate goes in cycles and while we are in a good period now, we should all prepare for a slowdown in sales at some point. As Gary Keller points out in his bestselling book, SHIFT: How Top Real Estate Agents Tackle Tough Times, there is a natural buildup of listing inventory from January through April and an offsetting decline in inventory from May through October.

If this is not a Buyers’ or a Sellers’ Market, how do buyers or sellers know if it is a good time to buy or sell? That depends. When I present this information to my clients, my sellers may be inclined to wait for inventory to drop so they can sell at a more competitive price and my buyers may want to wait for inventory to increase so they have more selection and price negotiation power. However, both buyers and sellers need to look at other factors, in addition to inventory, before they decide to move or wait.

With mortgage rates and home prices expected to rise in 2015, by waiting, buyers face potential affordability barriers while sellers ultimately risk being faced with fewer buyers as a result. All signs point toward making the move now.

The decision to buy or sell is a very important decision for my clients and they should never be forced to make a decision that doesn’t sit right with them. As their real estate agent, my greatest value is acting as their local economist of choice by presenting them with the most current market facts and analysis to help them make the most informed decision.

To start your Las Vegas home search today visit TheVegasRealEsateAgent.com 

For a free home valuation report visit HomePriceSearchTool.com to see how much your home would sell for in today's real estate market.

Danny Phee, The Vegas Real Esate Agent, started selling real estate in Las Vegas in 2008. Today he is actively helping family's buy and sell their Las Vegas properties and enjoys being relied on as a knowledgable source and interpreter of Las Vegas Real Estate information. Contact him today at 702.354.1355 with of your RealEstate related questions!

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