March 3rd, 2015
Real estate information company Redfin predicted the housing market will see substantial growth in 2015 based on activity at the start of this year.
Redfin witnessed a greater number of individuals requesting home tours and homeowners listing their properties on the market. Year over year, the company saw 47 percent and 6.3 percent gains, respectively, in January. These figures indicate that demand is increasing, and sellers are supplying properties to meet that demand.
Another positive indicator of demand at the start of 2015 is the National Association of Realtors (NAR) Pending Home Sales Index (PHSI) for January, which showed month-over-month and year-over-year improvement. The PHSI tracks contract signings for home sales, thereby indicating what sales activity will look like in the future.
What’s driving homebuyer demand?
Numerous factors are working together to encourage consumers to purchase a home. In addition to benefits specific to the housing market, the economy is performing well.
“Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” said NAR Chief Economist Lawrence Yun. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”
With these factors working in favor of homebuying, it’s no surprise the PHSI hit an 18-month high. This and other recent achievements in the housing market are especially remarkable considering extreme winter weather in some parts of the country didn’t slow buying activity.
Getting an early start on spring
Typically, spring is the time when the housing market starts to pick up for the year. However, both buyers and sellers alike aren’t deterred by the cold weather. In fact, trade-up buyers may want to list their homes now rather than wait, according to a separate Redfin report.
Not only is spring seen as a more comfortable time to shop for a house, but it’s also thought to be a better time to get a property off the market quickly. Despite this prevailing thought, Redfin’s analysis showed there is only a minor difference between how fast homes sell in winter compared to spring. This means trade-up buyers can get a head start, especially considering both Redfin and NAR data showed consumers are out in the cold ready to buy. Furthermore, these buyers may find a healthy offering of properties to choose from if other sellers take the same approach and list ahead of spring.