Lack of supply creating tight competition in USA housing market
News by Propertyshowrooms.com
Those considering investing in property in the USA may want to act fast, as a lack of housing stock is making the market competitive. The National Association of Realtors (NAR) has revealed that while buyer interest in the country is solid, supply is limited. This is holding back contract signings, the Global Property Guide reported, but prime property is likely to be more in demand than ever.
Commenting on the latest Pending Home Sales Index, which is a forward-looking indicator based on contract signings, Lawrence Yun, NAR chief economist, explained: “Contract activity has risen for 20 straight months on a year-over-year basis,” he said. “Buyer interest remains solid, as evidenced by a separate Realtor survey which shows that buyer foot traffic is easily outpacing seller traffic.”
However, for investors considering property for holiday let, the good news is that the lack of housing stock is mainly affecting the first-time buyer market. According to Mr Yun, the supply of homes costing less than $100,000 (£63,548) is tightest, especially in the West. This means first-time buyers have fewer options when looking for a home and have to be aggressive to get their hands on their desired property.
While the spring is likely to see a slight increase in available inventory, NAR believes that a seller’s market is developing. “Much of the West is already a seller’s market for homes priced under a million dollars,” Mr Yun said. This is good news for those looking for a swift turnaround on property, but investors must still be cautious, as the USA real estate market is yet to fully recover. What’s more, conditions vary throughout the country and while the West may be a seller’s paradise, conditions are much more balanced elsewhere, especially in the Northeast.
Investors should still take heart, however, as the country is enjoying a favourable combination of tighter inventory, pent-up demand and pleasing affordability conditions. NAR believes this bodes well for 2013 and expects existing-home sales will increase a further nine per cent this year, mirroring the 2012 rise. International Property and Real Estate News from Propertyshowrooms.com
2013-02-06 17:17:00
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