Rising home prices, demand from home buyers, and less competition is making 2015 a stellar year to sell for many U.S. home owners across the country, says Daren Blomquist, RealtyTrac’s vice president.
Blomquist points to these three factors behind why this year is shaping up more favorably for sellers:
1. Stronger demand coming from buyers: Sellers in many markets are seeing stronger demand from a larger pool of buyers, including first-time buyers, boomerang buyers (previous owners who lost their home to foreclosure), as well as traditional owner-occupant buyers. Particularly of note lately, the number of buyers using Federal Housing Administration – typically low down payment loans often used by first-time home buyers – is on the rise, accounting for 23 percent of all single-family home and condo sales with financing in the second 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 this year 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 for 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 REALTORS® reported this 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 remains tight, which has forced buyers to have to compete for the 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.