The Wall Street Journal posted an article in their Developments blog outlining the fact that national home prices finally hit a bottom in 2012, and that next year will be the first time since 2006 where prices ended the previous year in positive territory. Optimism is taking hold in markets across the country, and the fact that more potential buyers finally have a sense of urgency (as noted in the WSJ post), resulted in the author being optimistic that more sellers may be encouraged to put their homes on the market in 2013.

Demand for Townhomes remains strong causing the median sale price to jump $54K

OVERVIEW

The surge in new contract activity last month translated into a rise in sales for November. Sales are higher than last year, but new contracts are down slightly compared to November 2011. This could be an early indication of tempered demand in the market. The inventory of homes for sale continues to shrink, and new listings remain at their lowest level in over a decade. The low supply is putting upward pressure on median sales prices around the region. Price gains have been most pronounced in the townhome segment, which has led in year-over-year growth for 3 consecutive months. Townhomes also lead all segments in sales growth, and active inventory declines, which indicates strong demand for these properties. As the year-end approaches, the market tends to slow down, which will likely equate to an even lower supply of homes for sale in the coming months. Buyer demand has been consistent, but seller participation in the market remains low. This is due to both economic uncertainty and potential equity losses in many areas. With the Federal Reserve’s September announcement of continued low interest rates through 2015, it is feasible that many buyers will wait it out until more options become available in the market. This could mean slower sales and stable prices in the near-term.

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