According to a recent article in the Denver Post, home sales are stronger than ever. In fact, in May, real estate buyers in the US snapped up properties almost as soon as the homes were listed. That type of response marks the strongest sales rate in nearly 10 years. As a result, sales of existing homes climbed 1.8% in May 2016 to an adjusted yearly rate of approximately 5.5 million – the highest it has been since February 2007. That news is good for the National Association of Realtors, which reported the rise in the sales rate.
According to the news, people remain committed to purchasing homes, despite the fact that the inventory is low, which also has caused prices to rise. The increased demand seemingly stems from lower mortgage rates and a relative healthy unemployment rate (4.7%).
Statistics further underscore the increased real estate demand in May as well. Homes during the month sold only after 32 days on the market – the fastest they have ever sold since industry insiders began monitoring the figure in 2011. Just a year ago, homes stayed on the market an average of 40 days. While sales increased in the West, South and Northeast in the US, they fell in the Midwest where the real estate is normally considered more affordable.
One report by the Denver Metro Association of Realtors showed that the median sales price for a single-family house in May was $398,000. That is a whopping 10.7% increase from only a year earlier. The median sales price nationally was $239,700 in the month of April – a 4.7% increase over the past year.
However, even with these gains, current homeowners are not motivated to list their real estate. Many people are still getting over the equity they lost during the crash. For those individuals, a sale would not generate enough of a profit to cover the cost of purchasing a new home. As a result, listings have fallen about 5.7% over the year, which means home buyers now have fewer choices.