If the housing market is indeed on its way to recovery, 2012 will be seen as the springboard for the upward movement. A year that began with promise ended by delivering on that sentiment with optimism and fourth quarter prices on the rise in many parts of the country.
About the only things down, according to a grassroots survey of HouseHunt agents, were inventory and sellers. Realtors reporting tight supplies of inventory were up 13 percent from the third quarter and 28 percent from the beginning of the year. Regarding prices, 35 percent saw slight upticks and 18 percent reported prices up 10 percent or more – an increase of 12 percent from the previous quarter.
“With the limited supply of inventory, it’s common for sellers to receive multiple offers on homes priced at less than $500,000,” said Realtor Sandra Ormerod, who works in the Northern California cities of Sonoma and Santa Rosa. “In some cases, sellers are pricing homes slightly under market value to generate multiple offers for over the asking price. I’m telling my buyers to be aware of this.”
Ormerod said inventory is at a seven-year low in her area and average prices are up about 15 percent.
“Values are beginning to climb and sellers who have equity and have been sitting on the fence are beginning to test the market,” she said.
Realtor Steve Davis is dealing with similar circumstances in McKinney, Texas, except many sellers there appear to be playing the waiting game. And with inventory down 50 percent from a year ago, having fewer sellers has led to multiple offers and houses spending an average of 40 days less on the market than a year ago.
“I’m seeing quite a bit of activity because the inventory is down significantly,” Davis said. “Prices have gone up some, but a lot of people are holding off to see if they go even higher. But we didn’t take as big a hit price-wise as some parts of the country, so prices are pretty much back at a level they were in 2008 when the downfall started.”
In metropolitan Charlotte, N.C., Realtor Donna Johnston is realistic when she says things will likely never return to the boom days before the bubble burst. But she remains optimistic that a steady supply of business in 2012, particularly in the typically slower latter part of the year, bodes well for the industry moving forward.
“It’s never going to get as crazy as it was in 2007-2008 because of lending,” she said, “but I think the market will improve even more if the atmosphere continues to stay positive.”
Johnston said there was only four months of inventory in certain parts of Charlotte in the fourth quarter compared to 36 months in the final quarter of 2011. She added that houses in the $250,000 to $500,000 range were spending about two weeks to a month on the market in many cases.
“If it’s in selling condition and the house is priced right, there definitely are going to be multiple offers,” she said. “Appraisals are also affecting matters, but mostly in a bad way.”
Realtor Cindy Mottl, whose suburban Chicago communities include LaGrange and Western Springs, echoed Johnston’s opinion and thinks that a better appraising process would make transactions go a little smoother.
“Appraisals remain a big issue with appraisers not recognizing the sharp increase in buyer activity and the limited supply of houses on the market,” said Mottl, who reported that the time houses spent on the market Western Springs in 2012 dropped a whopping 70 percent from the previous year.
In the northern sections of metropolitan Atlanta, Realtor Mary Ellen Vanaken said a fairly slow start to 2012 was bolstered by a surprisingly strong fourth quarter. As is the case with many of her peers, Vanaken said a tighter supply of houses on the market has kept things “pretty interesting.”
“There’s not a lot of inventory here, so houses that are going on the market are getting multiple offers, which hasn’t been seen in a while,” she said. “It’s a little different from past years when it was mostly gloom and doom, but hopefully the positive momentum we have and the fact that buyers are realizing things are picking up gives us some good momentum heading into 2013.”
Additional results from HouseHunt’s fourth-quarter survey include:
Houses spending 60 days or less on the market were reported at 40 percent, up 10 percent from the first quarter of the year and 18 percent from the fourth quarter of 2011.
Twenty-two percent of Realtors reported negative appreciation in pricing, down 6 percent from the previous quarter and 28 percent from the start of 2012.
Seventeen percent of agents reported “very tight” markets. Of those areas, only Deerfield, Ill., didn’t register a price increase from the previous quarter. Otherwise, the tight inventory correlated with an increase in closing prices, with agents in metropolitan Phoenix reporting increases of 15 percent to 30 percent and agents in Iona, Davie and Coral Gables, Fla., reporting jumps of 20 percent to 25 percent. All other increases were in the 5 percent to 15 percent range.
Agents reporting a “limited supply” of inventory worked in 16 states – California, Colorado, Florida, Georgia, Idaho, Illinois, Maryland, Montana, Nevada, North Carolina, Oregon, Rhode Island, South Carolina, Texas and Virginia.
Cities showing the biggest increase in average home prices were Valparaiso, Fla., up more than 30 percent; and Fernley, Nev., and North Mountain Ariz., both up 25 percent to 30 percent.
For the first time in many quarters, no agent reported prices being down more than 15 percent, with only Dover, Delaware, showing a decrease in the 10 percent to 15 percent range.
HouseHunt’s Quarterly Comparison Chart For the U.S. | 4th Qtr 2012 Results in Red