An important part of being successful in the real estate industry is being aware of and responding to the current trends. Knowing what your clients will be facing when it comes to factors such as inventory, pricing, and market volatility will help you set realistic expectations and help them find the type of home they want. Because the market is always changing, it’s a good idea to do a monthly check-in on the latest research.
May 2018 Real Estate Statistics
The U.S. real estate market continues to be hot, with limited home inventory, rising prices, and available homes selling quickly. These are some of the trends you should be aware of as we move through the summer months:
Shrinking Inventory
Inventory was six percent higher in May than it was in April, but don’t let this typical seasonal increase deceive you. Inventory is in fact six percent less than it was in May 2017, so the pool of available homes is indeed still shrinking. Savvy realtors will use this opportunity to focus on land sales so homebuyers can build on their own lots.
Climbing Prices
Realtor.com has reported a median listing price of $297,000, which is the highest it has been since they started reporting on this metric in 2012. This is an eight percent increase from May 2017, which is in line with the typical annual increase, indicating that we will continue to see price increases. Realtors can use this information to get uncertain buyers off the fence as it’s safe to assume that prices are only going to go up.
Quick Sales
These higher prices are not slowing down the market—properties are selling faster than ever with a median time on the market of 55 days. This is five days faster than the same time last year. Because of this and other factors, realtors can expect to encounter frustrated clients who are not able to get the homes they want. One possible solution is building new to sidestep the inventory issue, lock in a price, and get a predictable move-in date.
May 2018 New Construction Statistics
In addition to a booming economy, all of the above factors continue to contribute to the ongoing rise in new construction. The U.S. Census Bureau has reported that the growth in May was even higher than expected.
Building Permits
Permits for single-family homes were about two percent less in May than they were in April. However, they were about eight percent higher than May 2017, so new home construction has continued to increase since the previous year. This is good news for owners who are thinking about building new because it means the market is still booming.
Housing Starts
Not surprisingly, the growth in housing starts is in line with the overall industry growth with an increase of about four percent over April and twenty percent higher than last year. This increase can likely be attributed to a desire to increase overall inventory and individual owners building new because they can’t find a suitable existing home.
Housing Completions
New housing completions also increased eleven percent over April, but based on the real estate statistics, this is not enough to alleviate the shortage in inventory.
What does all of this mean for you and your clients? Finding a new home these days isn’t easy. Even when you are able to find a suitable existing house in the inventory, there is no guarantee that your client’s offer will be accepted, which makes it difficult to predict how long it will take to get them in a new home. If you are looking for a solution that is predictable in terms of both price and timeline, consider steering your clients toward new construction.
The Adair Homes Realtor Referral Program allows you to get more satisfied clients (and more commissions) by offering new construction options. You sell the land and we do the rest!
