CoreLogic released its monthly report last week, revealing that the inventory of unsold homes is at the lowest point in five years. The reason? Negative equity, which is proving to be a driving force in the real estate market.
Homeowners who owe more on their mortgage than the current value of the home are deciding to hold onto property and not sell now. The result of this has led to a decreased inventory of available homes on the market, which has consequently contributed to an increase in selling prices.
The below results are some of the “key findings” taken directly from CoreLogic’s report:
- The Home Price Index (HPI), including distressed sales, posted two consecutive months of year-over-year increases in April 2012 – the first such increase since the summer of 2010 when the housing market was benefiting from tax credits
- Single-family construction activity increased 2.3 percent in April, and it’s up 25 percent over the last six months
- Months’ supply of unsold homes fell to just more than six months in April 2012 and is currently at the lowest level in more than five years
- As the flow of REOs has slowed over the last 18 months, negative equity has become a positive force in real estate markets by restricting supply in the face of increasing demand
- The housing market has transitioned from pricing dynamics driven by economic weakness and high shares of distressed sales to one of restricted supply, which will likely exist for some time to come – a reason for optimism in many hard hit markets
*Information gathered from CoreLogic
The restricted inventory of homes will continue to lead to an increase in selling prices (which is good news for those holding on now in hopes to sell later). Still, homeowners are starting to see prices climb back up to more realistic values and the hard hit times of a year ago seem to have passed.
If you have interest in property on Florida’s Gulf Coast, please click here, Southwest Florida Real Estate For Sale. For more information on a specific property, please contact Jim Mulligan, Suncoasteam Realty at 941-235-7474 or firstname.lastname@example.org.