It is the season of "market" speculation. Excitement is building for local businesses, home sellers, even local growers. To get ready for summer, I am still looking at several main factors: low housing inventory and local new construction trends. (I won't try to predict the weather!)
Taking Inventory
Industry speculation is consistent with what's happening locally and “inventory” is the buzzword. Nationally and locally, inventory levels are historically low. "Inventory level” means the time it would take to sell all of the homes currently available for sale. The National Association of Realtors (NAR) considers six months to be the norm. As of January 2013, however, NAR data put inventory levels closer to 4.2 months – which is the lowest rate nationally since April 2005.
Our local market definitely supports this low inventory scenario. To put this information context, in my office at The Lee Ann Wilkinson Group of Prudential, Gallo Realtors, actual property sales increased 43 percent and the total dollar value of these sales increased nearly 33 percent last year. Buyers are still cautious and believe it is a “buyer’s market.”
The market is actually evening out – which means buyers will need to be more open to negotiation. We have even seen a noticeable increase in multiple offers on properties (especially in-town Lewes). We even had a home listed, shown and sold - in the same day!
Here are a few key points to remember:
- We are not going from a low market to a high market in one step. We went down in steps, so we will have to go up in steps.
- Appraisers are required to use no more than the past 6 months sold comparable properties to determine a value today.
- If you want to sell your house now, you need to sell it for what it is worth now.
If You Build It
Another major component of this season’s beach real estate trends is new construction. My office has seen an increase in the past month in inquiries from developers and builders that want to start projects. In its March 1, 2013, press release, the U.S. Census Bureau put January 2013 seasonally adjusted construction rates at $883.3 billion, or 7.1 percent above the January 2012 estimate of $824.7 billion.
While new construction may be on the rise in general, I feel strongly that the biggest segment to dry up here at the beach will be individual single-family home lots with no builder tie-in (ones for which you could hire any builder to build your custom home). As fewer lots are available, prices will rise. If you are a buyer who wants to build a custom home, my best advice is to buy a lot soon.
In addition to the low inventory climate, our area business owners are anticipating a busy summer. Hopefully the national economic forecast and seasonal weather forecasts will align for a great summer season!
"Market Growth"
Of course, another market consideration is next weekend's opening day for the Historic Lewes Farmer's Market (Saturday, May 11)! Join just about everyone in town at The Lewes Historical Society between 8 a.m. and noon next Saturday. As far as projections for that market - it's an easy one to call: it will be exciting for buyers and sellers, and a great kick-off for summer!
Lee Ann Wilkinson is the top-selling REALTOR in Sussex County for 2012. Find more information about The Lee Ann Wilkinson Group of Prudential, Gallo REALTORS at www.lewesrealestate.com or by calling (302) 645-6664.
