Homes sales are up in three of the four US regions. The question industry experts are asking is how much the lack of inventory is affecting the sales potential. Here in the Washington DC area, which is technically the South but on the line with the Northeast … any agent will tell you that they have pent-up demand in that buyers are not finding homes that work for them given the low inventory rates.
Some prognosticators suggest it is a market yet to fully recover while others say it is the lack of consumer confidence and the fact that interest rates are on the rise. However, rates are still very low and expected to go higher so buyers sitting on the sidelines because of the current interest rates are getting bad advice. It seems that if the decrease in sales was caused by an eroding of consumer confidence and/or rising interest rates, each region would have seen similar results.
The National Association of Realtors (NAR) just released their 2013 4th Quarter Housing Report. The report revealed that home sales numbers barely outperformed (an .08% increase) those in the 4th quarter of 2012.
Three of the four regions in the NAR report had an increase in sales: Northeast (+7.1%), Midwest (+2%) and South Regions (+3.6%). A big fall-off in sales occurred in the Western Region. The dramatic fall-off in the West (-8.1%) can be directly linked to a shortage of inventory in their hottest markets.