Spring comes early for U.S. real estate
Many more people are shopping for homes than is typical for the winter months
Could we be looking at an early spring this year — not in meteorological terms but real estate? Could the chilly December to February months, which traditionally see fewer buyers out shopping for houses compared with the warmer months that follow, be more active than usual? And if so, what does this mean to you as a potential home seller or buyer?
There is growing evidence, anecdotal and statistical, that there are more shoppers on the prowl in many parts of the country than is customary for this time of year, more people requesting “preapproval” letters from mortgage companies, more people visiting websites offering homes for sale, and more people telling pollsters that they expect home prices to continue rising and that the worst of the housing downturn is long past. There is even data showing that during holiday-distracted December, there was a jump in visits to homes listed for sale.
Coldwell Banker, one of the largest brokerages in the country, says traffic to its listings website was up 38 percent during the past month, compared with year-earlier levels. ZipRealty, an online brokerage based in Emeryville, Calif., reports that its website has seen an unusual 33 percent increase in home shoppers in the first half of January compared with December.
Redfin, a brokerage with headquarters in Seattle, found that even during the week of Dec. 30, shoppers requesting home tours by agents jumped 26 percent over the four-week average, and 9 percent compared with the same week the year before.
Economists at the National Association of Realtors report that foot traffic at houses listed for sale in well over half of all markets around the country was higher this past December than the year before. Given the strong December reading, says Paul C. Bishop, vice president for research at the association, sales in the coming weeks should be “robust.”
Even in markets that typically hibernate until the snow melts, there are indications of an unusually early start to the 2013 season. Joe Petrowsky, president of Right Trac Financing Group, a mortgage company near Hartford, Conn., says he has received a much higher volume of requests for “preapproval” letters — which tell sellers that a purchaser is qualified for a mortgage loan — compared with what’s typical at this time of year.
“I’m seeing twice as many buyers this January as last January,” Petrowsky said in an interview. “People have finally figured out that prices are moving up, interest rates are really low, and they don’t want to miss out on the opportunity.”
In the Washington, D.C., area, Long & Foster Real Estate, the country’s largest independent broker, reports strong “signs that we are going to have an early spring” in terms of home sales. In an unusual occurrence for January, according to Steve Wydler, a Long & Foster agent in Northern Virginia, “multiple offer situations are becoming increasingly common, with prices being escalated above asking price.”
Gretchen Castorina, an agent with brokerage firm Allen Tate in Chapel Hill, N.C., says “spring started last month” in terms of new clients and multiple-bid competitions. Even in the dark final days of December, Castorina says she was busy. “I was showing houses on Dec. 31,” she said, and wrote a contract for purchasers just before Christmas.
Jo Ann Poole, an agent with Simi Valley Real Estate outside Los Angeles, says that for a variety of reasons “in the last 10 days people have figured it out,” and are making real estate moves that might have normally been pushed back into the spring months.
Polling by Fannie Mae, the government-backed mortgage investor, may shed some light on what’s motivating buyers. In a survey of 1,002 adults in December, Fannie found the highest share of consumers in the survey’s 2-1/2 year history who expect home prices to rise during the coming 12 months. Forty-three percent expect mortgage rates to jump and 49 percent believe the cost of renting will increase.
Roll all this together, says Doug Duncan, Fannie’s chief economist, and you can see why consumer sentiment “could incentivize those waiting on the sidelines … to buy a home sooner rather than later” — pushing spring behavior into mid-winter.
What’s missing from this equation? More owners listing their homes for sale. Inventories of available homes are down in most markets, mainly because many sellers are under the impression that it’s still a buyer’s market filled with lowballers who won’t pay them a fair price. In many parts of the country, that is last year’s news. In 2013, it’s simply no longer the case.
Kenneth R. Harney is a syndicated real estate columnist.