A great time for sellers: 3 reasons why
NEW YORK Aug. 19, 2015 Rising home prices, homebuyer demand and less competition is making 2015 a stellar year to sell for many U.S. homeowners across the country, says Daren Blomquist, RealtyTrac's vice president.
Blomquist points to three major factors behind the favorable climate for sellers:
1. Stronger demand coming from buyers:Sellers in many markets see strong demand from a larger pool of buyers, including first-timers, boomerang buyers (previous owners who lost their home to foreclosure), as well as traditional owner-occupant buyers.
Particularly of note: The number of borrowers using Federal Housing Administration (FHA) loans typically low downpayment mortgages often favored by first-time home buyers is on the rise. It accounted for 23 percent of all single-family home and condo sales with financing in the first half of 2015. That marks the highest share since the first quarter of 2013, according to RealtyTrac's Midyear 2015 U.S. Home Sales report.
2. Home prices are skyrocketing:Single-family home and condo sellers in the first half of 2015 sold for an average of 13 percent above their original purchase price.
"So far in 2015, [sellers] are realizing the biggest gains in home price appreciation since 2007," Blomquist says. "In June, sellers sold above estimated market value on average for the first time in nearly two years."
Median sales prices of existing-homes pushed above the previous 2006 peak to a record high in June, the National Association of Realtorsreported last week. The median existing-home price for all housing types was $236,400 in June surpassing the peak median sales price set in July 2006 at $230,400.
3. Sellers have less competition:Inventories of for-sale homes remain tight, forcing buyers to compete for a limited supply.
Distressed sales properties in the foreclosure process or bank-owned accounted for 8 percent of all single-family and condo sales in June, the lowest monthly share since January 2011. In 2011, the share of distressed sales had reached a monthly peak of nearly 46 percent of all single-family and condo sales.