Opportunity is Knocking

The real estate market is moving more and more into a complete recovery. Home values are up. Home sales are up. Distressed sales (foreclosures and short sales) have fallen dramatically. It seems that 2017 will be the year that the housing market races forward again.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout the summer, supply is not keeping up.

Here are the thoughts of a few industry experts on the subject:

Chris Lynch, Owner, Legacy Properties Sotheby’s International Realty:

“We have had the best of both worlds for so long that we didn’t think the solid real estate market fundamentals would ever come to an end. For the better part of the last 5 years we have enjoyed a healthy stretch of what is a “classically Maine” slow and steady growth in unit sales, accompanied by trending modest increases in the median price. In general, there was seemingly just enough inventory of well priced homes to satisfy the demands of a growing number of new Maine lifestyle converts joining an already enthusiastic local buyer base. We should have been able to see an inventory shortage coming in selected cities and towns in Maine.

There were plenty of warning signs that inventory in some of the most popular markets in Maine would start to suffer with growing demand overwhelming available inventory for sale. The not so subtle hints were evidenced in the first half of 2016 with year over year unit sales reported to be more than 20% higher in February, April, and May and positive growth during 11 of 12 months in 2016. The Maine real estate market overall has also posted annual increases in the median sales price for the 13th consecutive month.“

**Lawrence Yun, Chief Economist at *NAR***:

“Sellers are in the driver’s seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers. Buyers are showing resiliency given the challenging conditions. However, at some point — and the sooner the better — price growth must ease to a healthier rate. Otherwise sales could slow if affordability conditions worsen.”

**Ralph McLaughlin, Chief Economist at *Trulia***

“Nationally, housing inventory dropped to its lowest level on record in 2017 Q1. The number of homes on the market dropped for the eighth consecutive quarter, falling 5.1% over the past year.”

Freddie Mac

“Tight housing inventory has been an important feature of the housing market at least since 2016. For-sale housing inventory, especially of starter homes, is currently at its lowest level in over ten years. If inventory continues to remain tight, home sales will likely decline from their 2016 levels. …all eyes are on housing inventory and whether or not it will meet the high demand.”

Bottom Line

If you are thinking of selling, now may be the time. Demand for your house will be strongest at a time when there is very little competition. That could lead to a quick sale for a really good price.

If you have concerns about being able to find a home once your’s is under contract, we have creative solutions that may help. Contact us for more information. We are Maine’s leading real estate company.

The Maine real estate fundamentals are undoubtedly strong, as is the economic environment with low interest rates, low unemployment (3%), and improving inventory numbers. We suspect that 2017 will be another record year!