We are all looking for signs of when the housing market will turn around. As a Realtor, I don’t have all the answers. Shocking I know. Most news you hear is national and has nothing to do with your neighborhood, not to mention that many sources for this “news” have alterior motives, but that’s for another post. But there are other indicators — not including the familiar days-on-market, new listings per month, and new contract activity — we can monitor to see if the market is turning around.
Fewer Builder Concessions
Look for new-home builders in your area, as a sign of new confidence, to curtail their offerings of free mortgage payments, new toasters, designer landscaping, and other concessions they rolled out at the start of the downturn. Also, look to see how many homes are under construction that are not under contract. This is a good indicator of their confidence in their ability to sell those homes in the near future.
New Jobs vs. New Housing
Historically, one new home owner is created for every two new jobs, so if job creation continues in your area and builders are scaling back on production, it’s just a matter of time before the supply and demand equation moves toward equilibrium. Your local chamber of commerce can help with those numbers.
Months’ Supply
The country had about a 10-month supply of housing at the end of last year, but the figure you’re interested in is the months’ supply for your market. The historical norm is closer to six months. I’m happy to help, so let me know if you’d like the numbers for your neighborhood.
Visitors per Listing
Look at the visitor trends tracked by your local MLS using today’s computerized lockboxes. You can see not only how many visitors view a house but how long they stay; more visitors staying longer suggests buyers are getting serious. Not all Realtors use these right now. We’ve tried a couple different systems, and between the cost, and shall we say –a resistance to embrace technology on the part of Realtors, these systems are slow to take hold.
Rising Apartment Rents
Healthy rental rate increases show strong demand for rentals, but if such increases go on for too long or rates rise too steeply, renters will start inquiring about buying.
