{"id":605,"date":"2016-03-17T04:33:57","date_gmt":"2016-03-16T23:33:57","guid":{"rendered":"https:\/\/nohasslelistingblog.com\/?p=605"},"modified":"2016-03-17T04:36:13","modified_gmt":"2016-03-16T23:36:13","slug":"market-clues","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=605","title":{"rendered":"Market Clues"},"content":{"rendered":"

December 2015 ended with a bang \u00e2\u20ac\u201c with higher levels of activity and demand than is typical \"Travis<\/a>for December. This of course would lead most to believe that if December was that strong, then surely January would follow suit.\u00c2\u00a0\u00c2\u00a0 Ever the contrarian, the market started 2016 with the whimper typical of most Januaries.\u00c2\u00a0 This left prognosticators grasping at straws for trends.\u00c2\u00a0 After so many years of uncertainty, one can appreciate the need for certainties.\u00c2\u00a0 But the fact is, 2016 is still in its infancy and it will be the end of February before any definitive trends appear.<\/p>\n

Before you toss this article in the trash (you weren\u00e2\u20ac\u2122t really going to, were you?) there are a few things we can<\/u> examine. As the real estate market is in essence a study in supply and demand, it is always worthwhile to take a glance at those two components.<\/p>\n

Of these two factors, let\u00e2\u20ac\u2122s begin with supply – the slower moving of the two and therefore perhaps the easier one to examine.\u00c2\u00a0Supply also can tell us a lot about the health of the market; is supply being consumed rapidly or is it accumulating? 2016 started with a 10% drop in inventory compared to 2015 but \u00e2\u20ac\u201c like most statements \u00e2\u20ac\u201c this one has a slight qualifier.\u00c2\u00a0 As we\u00e2\u20ac\u2122ve mentioned in previous articles, a more concise evaluation of the supply situation appears when you look at specific price points.\u00c2\u00a0 Not surprisingly, supply is most constrained and likely to continue to be so, at the 300K and under range.\u00c2\u00a0 The reason is really two-fold.\u00c2\u00a0 Builders, whom are building at higher rates than we have seen in years, are largely building single family homes in the 400K+ range.\u00c2\u00a0 The sheer cost of the land and commodities essentially make it prohibitive to build single family homes for less.\u00c2\u00a0 Additionally, as the values of homes continue their gentle climb upwards \u00e2\u20ac\u201c the lower price ranges begin to further erode.\u00c2\u00a0 Even at a moderate increase of 4-6% yearly, a $275,000 home exceeds $300,000 in just a couple of years.\u00c2\u00a0 Add to that the fact that FHA financing (the most commonly used financing in the valley) currently caps out at $271,050 \u00e2\u20ac\u201c putting the largest pool of buyers in the smallest group of available sellers.<\/p>\n

Summing up the supply situation is Michael Orr of the Cromford Report:<\/p>\n

\u00e2\u20ac\u0153The price ranges with the biggest loss in new listings year over year are:<\/em><\/p>\n